The UMPP policy was launched in 2005-06 by the government to provide power at a competitive cost to consumers by achieving economies of scale.
PFC Consulting, the consultancy arm of Power Finance Corporation (PFC), has invited bids to appoint a technical consultant for its 4,000 MW UMPP in Deoghar, Jharkhand. After a gap of four years, when the last ultra mega power plant (UMPP) was commissioned in 2015, the government is hopeful of reviving the UMPP policy.
The technical consultant will conduct the site feasibility study, and obtain the environmental and forest clearances for the power plant. The bid opened on June 24 and will close on July 22.
The Deoghar UMPP will source around 105 million cubic metre per annum of water from the river Ganga through a proposed 125-km-long pipeline, while coal will be allocated from Rajmahal Coalfields through a merry-go-round-rail (MGR) corridor of around 100 km. Coal reserves at Rajmahal are estimated at 13 billion tonne.
As per tender document, the timeline for proposed technical studies and clearances is set as 390 days from the date of award.
The UMPP policy was launched in 2005-06 by the government to provide power at a competitive cost to consumers by achieving economies of scale. The government initially proposed to set up 15 UMPPs but only four successfully got awarded.
While Tata Power operates the Mundra UMPP in Gujarat, Reliance Power owns Sasan UMPP in Madhya Pradesh.
The other two UMPPs that were bagged by Reliance Power got cancelled on issues related to higher cost of imported coal for Krishnapattanam UMPP in Andhra Pradesh, and acquisition of land for Tilaiya project in Jharkhand.
Analysts believe if the demand for power grows at 5-6% per annum, the requirement for coal-based power will continue to grow. As per estimates of the ministry of power, even if renewable targets are met by 2022, India will need additional around 30,000 MW capacity by 2027. That is where these UMPPs will come handy, said a Mumbai-based power sector analyst.
“The project will generate developers’ interest only if it provides land, water and coal linkages at the time of award. They are likely to be cautious now after burning fingers in previous awards,” the analyst said.