Cabinet approves 2000MW thermal plant in Orissa

Tuesday, 25 October 2011 21:52

In a joint initiative, Kerala and Orissa have firmed plans to set up a 2,000 MW thermal plant in Orissa, sourcing coal from Baitharani fields in the state. The project details were discussed at a meeting of senior officials from the two states at the initiative of Kerala Chief Minister Ommen Chandy and the state cabinet approved the proposal. The proposal would be taken up for the approval of the Orissa government soon.

The Centre had earlier allotted Kerala, Orissa and Gujarat to prospect coal equivalent to 3,000 MW each for the three states from the Baitharani fields.Kerala, Gujarat, and Orissa were allotted equal share of the block estimated to have 608 million ton of coal reserves. Coal prospecting is currently going on in the block under a joint-venture company floated by the three States for undertaking mining operations.

The plan, when the State was allocated portion of this block, was to have the Kerala State Electricity Board (KSEB) set up a 1,050-MW power plant at Cheemeni in Kasaragod district to utilise the coal. But the State had to shelve the plan due to local resistance.

Subsequently, the Kerala government tried to involve National Thermal Power Corporation Ltd. in a joint venture with the KSEB to set up a power plant of 1,050-MW capacity in Baitarani West. But NTPC Ltd. categorically rejected the idea and said it was interested only in setting up a power plant of its own to utilise Kerala's allocation of coal.

The company offered to give Kerala 500 MW of power from the proposed plant, but at the usual cost after deducting the price of the coal. The company also wanted the right to sell the rest of the power generated at the plant to other States. "Kerala could ill afford to give up right over 500 MW of power, because our electricity demand is fast increasing," the official said.

To start with, the two states would form a Special Purpose Vehicle (SPV) for implementing the project, estimated to involve a cost of Rs 8,000 crore when completed in three phases of 650 MW each.

The power generated by the plant would be equally shared by the two states, which was expected to make up power crunch faced by them and meet the growing future needs.

Source- Times of India, Hindu