In India, Tamil Nadu eyes coal power reboot in spite of local fears

India's southern Tamil Nadu state is considering restarting a shelved 1.6 gigawatts (GW) coal-fired power project in Uppur, two state government officials said, as its debt-ridden utility seeks to expand its coal fleet to address rising power demand.

The state, India's second most-industrialized, epitomises the country's approach to balancing energy security and tackling climate change as Prime Minister Narendra Modi prepares to head to Glasgow for the U.N. COP26 summit may build more as they generate the cheapest power, despite calls to deter use of the dirty fuel.

The project was shelved in March after the National Green Tribunal temporarily suspended an environmental permit granted to the project, citing concerns from local farmers and fishermen over land acquisition, the height of a bridge carrying effluents and the coal being used.

After the order, the Tamil Nadu Generation and Distribution Corp Ltd (TANGEDCO) had decided to shift the project to Udangudi, about 200 kilometres away from Uppur, where a 1.3 GW coal-fired plant is already being built.

However, the new state government, which came into office in May, is now working on restarting the power plant in Uppur. More than 30% of the work is complete and at least 10 billion rupees ($134 million) has already been invested, two officials from project operator, Tamil Nadu Generation and Distribution Corp Ltd's (TANGEDCO), told Reuters.

"The previous (shifting) decision was taken in haste. So much money has been invested. We are now trying to complete all formalities and restart the project," one of the officials said. The declined to be named as they were not authorised to speak to the media on the issue.

While Tamil Nadu is among India's top renewable energy producers, it is also constructing the most number of coal-fired plants nationwide, according to London-based environmental think tank Carbon Tracker.

"New coal projects are also essential because many of our power plants are old, and need to be phased out in a few years," said one of the TANGEDCO officials.

Unlike many parts of Europe or the Americas, India does not have access to cheap domestic gas, which can be used to generate reliable electricity supplies when renewable energy generation drops after sunset or when wind power output goes down.

'FAIR COMPENSATION' The officials said TANGEDCO has allayed fishermen's concerns at the Uppur plant by offering to increase the height of a bridge carrying effluents, so that fishing boats can pass under it, and is working on fixing land acquisition issues.

Local administrative officials in Uppur have already begun compensating residents for taking over their land for the project. Reuters reviewed three such notices.

P Thivakaran, a local political leader who has organised protests against the power plant, said the project affected the flow of water into reservoirs, adding that livelihoods of hundreds of area residents were at stake as adequate compensation was not given.

"We understand electricity is important, but those affected need to be compensated fairly," he said. The project could displace 300-400 families in the region, locals say.

The officials expect the first of the two units of the Uppur project to be completed in late 2025 or early 2026, while the first unit at Udangudi is estimated to be ready by 2024. Both plants will meet 70% of their coal needs through imports.

Indonesia, Australia and South Africa are the biggest suppliers of coal to the world's second largest importer.

($1 = 74.7650 Indian rupees)