UMPPs get rolling again, two in Orissa, one in TN next fiscal

The ultra mega power project (UMPP) scheme which has faced slippages due to various reasons, is set to get a boost in the next financial year, with the government planning to bid out at least three such projects over the next few months.

Among the three projects, two will be in Orissa and one in Tamil Nadu. There is also the possibility of a fourth to be explored in Gujarat even though this proposal is at an initial stage, a power ministry official told FE, asking not to be named.

Out of the three, the proposed UMPP at Bedabahal in Orissa is at advanced stage as it has received all clearances. It is awaiting clarity over the use of captive coal mines which have come under the environment’s ministry recent no-go categorisation restricting any mining activity.

Power Finance Corporation (PFC), the nodal agency for UMPP programme, is also working at a feverish pitch to get two other projects —one at Cheyyur in Tamil Nadu and the other at Sakhigopal in Orissa —cleared so that these could also be put up for bidding in 2011-12. In addition, Gujarat has offered four different sites in the districts of Porbandar, Junagarh, Navsari and Kutchh for setting up a second UMPP in the state, but this is yet to be vetted by the Central Electricity Authority (CEA).

“We hope to get clearances for the three projects and a fourth will be a bonus,” said a PFC official involved in the UMPP programme.

The government is reviving the UMPP programme, since just a few such projects of 4,000 mw each could add substantial capacity to the Indian generation basket.Though the scheme was launched with much fanfare in 2006, only four UMPPs have been allotted so far, of which three were bagged by Reliance Power in Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand). The fourth, at Mundra in Gujarat, was bagged by Tata Power. No UMPP was put under bidding in 2010-11.

The power ministry plans to set up nine such plants, with four projects at pithead and five in coastal locations, to help meet the electricity generation target of 100,000 MW for the 12th Plan period (2012-17). UMPPs are large-sized power projects requiring investment between R16,000 and R20,000 crore. The projects will use super-critical technology to achieve higher levels of fuel efficiency with less green house emissions. The UMPP at Bedabahal in Orissa was put under initial bidding last year, but the last date for submitting requests for qualification (RFQ) was extended several times, since there is no clarity on captive coal blocks. The latest extension expires March 31. “We expect the project to be cleared after it gets another extension for a couple of months. The environment ministry has already shown flexibility in giving clearance for the captive coal blocks and a group of ministers (GoM) is examining the 'go, no-go' policy of MoEF,” the power ministry official said. In the case of Cheyyur project, clearance for the port — to ship coal as the project will be based on imported fuel — is expected soon. The committee set up to examine the port project in the light of coastal regulation zone (CRZ) provisions will submit its report to the government soon, after which clearances will be given. The project also requires forestry clearance, for which PFC is in touch with MoEF. The government’s capacity addition programme has been grossly inadequate in the past.

In the 9th and 10th Plans, less than half the targeted capacity was added. In the ongoing 11th Plan, while the Centre had originally planned to add 7,68,577 mw of capacity, the power ministry has now scaled down the target to 62,000 mw.

Capacity addition is critical as the country faces a huge energy deficit of 8.6% (2010-11 up to February) and peak deficit of 10.3%. The UMPPs, due to their sheer size, are positioned to play a key role in the government’s power capacity addition programme. Only a handful of such projects can deliver power equivalent to several conventional-sized power projects.