IMFA to start 120 Mw plant in October

Ferrochrome maker Indian Metals and Ferro Alloys (IMFA) will start power production from its 120 Mw coal-fired plant and will sold surplus power to state grid from next month onwards, government sources said.

"Within next two weeks, the power plant will be synchronized with the state grid and a power purchase agreement (PPA) too will be signed,” said an official of state-run power trader Gridco Ltd.

An IMFA spokesperson also confirmed the commissioning of the power plant in October.

IMFA had earlier stated that surplus power from the power station would be sold to state grid at a fixed price. However, Gridco has plans to add a clause to the PPA that the IMFA should sell some portion of its power at a variable cost, which is linked to production cost of coal.

Meanwhile, the state energy department has completed all procedural formalities for granting the proposal IMFA to change the status of its independent power unit to captive power plant and will issue an order in this regard within next 10 days.

"The IMFA proposal was pending for past few months due to some procedural delays, but now all the formalities have been completed and I think within 10 days, the notification will be out,” sources said.

The ferrochrome maker had proposed to become an Independent Power Producer (IPP) in 2007 and had intended to set up a 120 Mw thermal power plant with an investment of Rs 480 crore by sourcing fuel from its coal block.

The company was alloted Utkal-C coal block in Talcher coalfield in 1998. Though the company had initially intended to become an IPP, it later changed its plan and proposed to convert the status of the power plant as a captive power plant (CPP) because the block was alloted only for captive use.

The proposals for change of the status of the power plant, however, came much before the coalgate controversy, sources said.

The company has been operating a 108 Mw captive power plant at its factory, apart from the recent addition of a 30 Mw facility. With the commissioning of its upcoming 120 Mw plant, IMFA will have a combined generation capacity of 258 Mw.

The company invests a lot in power generation as electricity accounts for 40% of the cost of production of ferrochrome, which are used in making stainless steel.

Apart from the setting up power plants for captive use, IMFA has also intended to establish a 1,320 Mw IPP in the state. The proposal has been cleared in the Single Window Clearance Committee of the state government and will come up in the next High Level Clearance Committee, which is chaired by the Chief Minsiter.