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Welcome development in the power sector

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The report in the papers about Karnataka's plan to set up a 2000 MW power plant in Chhattisgarh (vide report captioned 'Chhattisgarh plant to ease power woes' on page 7, TOI of 23rd July - the text is reproduced below, since, apparently because of a goof up by TOI, the 'link' is taking it to a diffrent text) denotes a refreshing change in the mind-set of the powers that be heading the state power sector.

This is indeed a most welcome development, compared to the most inefficient and costly practice adopted so far of transporting coal all the way here from remote corners of the country (as well as the globe, as was proposed in the case of the Tadadi project), burning it to generate electricity, and then battling with the problem of fly-ash disposal. With this new arrangement, we are now poised to get clean power at our door-steps at the switch of just a button. And, actually, there's nothing new about it. It's only an extension of an already existing arrangement with the NTPC-PGCIL combine.

The arrangement with the NTPC-PGCIL combine had shown itself clearly as the model to follow from long. However, if the state had not been able to further it so far, the problem lay with its inability to agree to the payment terms under the contract, given the perilous state of the finances of the state's power sector. The answer to that has already been spelt out in the reforms agenda, which, though adopted by the government long ago, has continued to remain hijacked by a few vested interests, in the guise of protecting the interests of farmers, rural consumers, economically weaker sections, etc, etc. The fact however remains that they are the ones who harmed the most. The challenge before the government today therefore is to neutralise these vested interests, and push the reforms agenda hard.

There may arise an argument that with this arrangement, we will be passing on our burden to the people of Chhattisgarh. Well, fortunately or unfortunately, they are sitting on 87% of the coal reserves in the country, and if at all these are to be exploited, it is best done there itself, with the residual fly-ash being pumped back into the used pits, the costs whatever being passed onto the beneficiaries.

The ultimate answer of course is proper demand side management, which can happen largely through proper management of distribution, involving professional private players, again very much as spelt out in the reforms agenda. For more, click on:

Muralidhar Rao

Chhattisgarh plant to ease power woes Makes Economic Sense To Have Thermal Unit Near Coal Field Rishikesh Bahadur Desai |TNN

Bangalore: Power-starved Karnataka will build a coal-based thermal power plant in Chhattisgarh. It’s because the cost of transmitting power for 1,300 km would be cheaper than transporting coal from that mineral-rich state to the thermal power stations in Raichur or Bellary. In a reciprocal deal, Karnataka has to share power with Chhattisgarh.

Chief minister B S Yeddyurappa met his Chhattisgarh counterpart Raman Singh recently, and announced that the project had got in principle approval. Karnataka Power Corporation MD S M Jaamdar will give a presentation on the project at an allparty meeting in Vidhana Soudha on Wednesday.

The 2,000 MW project is estimated to cost Rs 10,000 crore. The state will invest 26%, and the rest will be mobilized through tenders. KPC sources said the central PSU BHEL may also invest in it.

The investment has been estimated at Rs 5 crore per MW, at current rates. The cost of production is estimated to be Rs 2.5 per unit. It may be further reduced if the Centre grants it the ultra mega power project status and provides some tax benefits.

Power will be transmitted through the Talcher-Kolar (T-K) high voltage line that passes through Chhattisgarh. It will be hooked to a local grid in that state. Other smaller lines and networks can carry this load from the plant site to the T-K line. The Power Grid Corporation of India will be responsible for the transmission.

According to the terms of agreement being discussed by the states, the Chhattisgarh government will hand over 2000 acres of land to Karnataka for the plant very close to a coal mine.

KPC will have to give away 7.5% of power produced to Chhattisgarh for free. It will also sell 30% of the power to Chhattisgarh’s power companies at a rate fixed by them. The power-sharing agreement will be valid for 20 years, KPC sources said.

The transmission-distribution loss is estimated to be around 4%. Thus, Karnataka will get nearly 58% of the power produced in Chhattisgarh; around 1,160 MW will be added to the state’s kitty. If all goes well, this will commence three years from now.

Karnataka has no coal mines and has to get the raw material from states like Chhattisgarh, Andhra Pradesh or Orissa. As a temporary relief, Chhattisgarh will supply 300 MW of power to Karnataka. Officials say this may cost around Rs 3.5 per unit.

How much power do we need?

The state’s installed capacity is around 7,700 MW. There is a scarcity of around 12% now and around 700 MW will suffice for immediate needs. But, with the purchasing power of the middle class growing steadily, the demand is expected to grow at 5% per year, an addition of 350 MW per year. The BJP government has promised to step up production by 1000 MW per year.

Why Chhattisgarh?

The state has rich reserves of coal. It makes sense to buy coal where it is produced as we don’t need to spend on transporting coal to Karnataka. According to Union coal ministry estimates, the state has 87% of the entire coal deposits of the country. The idea was mooted five years ago. But the proposal got bogged down due to political instability in Chhattisgarh.

Transport vs transmission

Though a direct comparison is difficult, officials say making power near coal mines and transmitting it to the state grid is cheaper than shipping coal to plants in Raichur or Bellary. In the Raichur power plant, nearly 14.2 tonnes of coal goes into producing 1 MW of power. It produces nearly 5 million units or 210 MW of power every day.

According to railway shipping rates, transporting one goods train full of coal between Chhattisgarh and Karnataka will cost roughly Rs 42 lakh. This contains around 3,835 tonnes of coal and can supply the needs of a 250 MW plant for a day. To work at full capacity, a 2000 MW plant needs coal from 10 trains feeding it per day. This will mean Rs 4 crore per day will be spent on bringing in coal alone. Transmission on the other hand will cost around 19 paise per unit or Rs 4,760 per MW.

What is a megawatt?

1 MW is 1 million watts of power. Energy of 1000 MW is estimated to light up over 10 lakh large houses. Thus, a 2000 MW plant operating at 75% capacity, would provide power to over 20 lakh power-guzzling houses. 1 MW is around 23,809 units. The state consumes around 112 million units per day. Producing power is cheaper than buying it from private producers. While cost of production is around Rs 2.5 per unit, the selling price of power is around Rs 8 per unit.


murali772's picture

Now, on to Bijapur

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Meanwhile, the Centre has responded positively to the state's proposal to set up a UMPP (ultra mega power project) in Bijapur district. "The Centre has agreed to send a team of experts to visit Kudgi and Mannur, where we have identified lands," Eshwarappa said. The government has identified places in Bijapur as the first project sanctioned by the Centre at Tadadi in Uttara Kannada district is hanging fire. There is enough land and water available for the purpose. Read more at:

Even if enough land and water were available in Bijapur, about which I have my own doubts, I would any day have recommended adding more capacity to the proposed Chhattisgarg project, or tying up with NTPC/ PGCIL combo (whose economics the state's efforts are unlikely to be able to match), while simultaneously attending to genuine reforms.

Muralidhar Rao

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