Centre pushes for new power plant at Talcher; Odisha seems not so keen
BHUBANESWAR: The Centre is keen on building a new power plant at Talcher in Odisha and wants the Prime Minister to launch the project later this week, despite the state’s seeming change of heart.
In a letter that conveyed as much, minister of state for power, new and renewable energy RK Singh wrote to Odisha chief minister Naveen Patnaik on Friday, suggesting the “opportunity not be missed”. Singh also informed the state that its request for swapping of high-tariff power from plants outside the state to those within Odisha could not be acted upon until those buying power from Odisha-based plants surrendered their claims.
The PM is to visit the coal city of Odisha on September 22 during which he will be laying the foundation stone for the revival of a fertiliser plant which is to be resurrected as a coal gasification-based urea facility. NTPC’s power plant a few kilometres away carries a long legacy — having been founded by Jawahar Lal Nehru — and is of emotive and economic importance to the area. As the existing plant will soon be outdated, the Centre is pushing for the construction of a new brownfield plant, Talcher Thermal Power Stage III, for which NTPC recently approved an investment of Rs 9,785 crore.
“The existing plant at Talcher is due for retirement by 2021 and it is necessary to construct a new plant to replace it with a modern efficient plant,” Singh wrote, while requesting the CM’s “personal intervention” for the grant of approval for the plant by a state-level committee.
Odisha has expressed its reservations over the cost of power it is being offered and its continued obligation to buy power from NTPC’s plants outside of the state. If it signed on without these concerns being addressed, the state believes it would end up having to spend Rs 500 crore every year over the next 25 years. In a letter to the Centre last week it had conveyed this, after being accused by minister for petroleum and natural gas Dharmendra Pradhan of delaying clearance to the project.
For Pradhan, who often takes the lead in the state BJP’s attacks on the Patnaik’s two-decade-long rule, the slow progress of the NTPC project undermines Odisha’s claim of offering an investment-friendly environment. A similar bitter exchange of words had preceded the inauguration of Indian Oil Corp’s Paradip refinery by the PM in February 2016.
The current controversy was stirred by Pradhan’s letter to Patnaik last week, raising a 15-month delay in the approval from the statelevel committee. Presumably irked by the fact that it came on the eve of a large investment meet Patnaik was hosting in New Delhi, the state shot off an official letter to the NTPC’s parent ministry. It offered to pay Rs 2.68 per unit instead of the Rs 3.40 that NTPC was proposing, and also asked for a swapping of power allocated to it from NTPC’s Barh-I and Barh-II plants in Bihar.
In his letter to Patnaik, Singh said the Rs 2.68 rate sought by the state was based on a feasibility report approved in 2010, while the current tariff of Rs 3.40 for the first year and a levelized rate of Rs 3.05 thereafter took into consideration the capital cost of a more modern and environmentally efficient plant. These rates, he said, were “very reasonable”.
On Odisha’s demand to use the state grid for transmission, the Centre clarified that if the state built its own transmission system to draw power, no PoC (Point of Connection) charges or losses would be levied on it. Alternately, if it drew its share through the state transmission utility, it would not have to pay for losses or any Central Transmission Utility charges.
On swapping, however, Singh said Odisha’s offer to surrender its allocation from Barh I and Bargh II had been shared with other states, none of which had come forward to pick up this power. “Till such a time the request for surrender of power by any of the beneficiary cannot be accepted because investments have been made in power plants based on the power purchase agreements signed by various states, including Odisha,” he said.
And for he same reason it could not allocate to Odisha power from NTPC’s Kaniha and Talcher plants and there was no surplus to spare.