Policy on anvil for thermal power plants

The Odisha government is in the process of formulating a comprehensive policy for coal-based thermal power projects and captive power plants (CPPs) in the state.

The proposed policy is likely to have a clause at the MoU (Memorandum of Understanding) level which will make it mandatory for all upcoming power plants to share 25 per cent free power with the state.

“The state will have an integrated policy which will cover coal-fired plants with independent power producer (IPPs) status and CPPs. The state government had policies for such power plants at different periods of time but they need to be streamlined,” said Chief Secretary B K Patnaik.

Asked if the policy will contain provisions for free power, Patnaik said, “The state Chief Minister had earlier written to the Centre on sharing of 33 per cent free power by power plants based on coal washery rejects. We will see what provisions pertaining to free power can be incorporated in the policy.”

Official sources said, the state is raising demand for free power from the IPPs to discourage setting up of more coal-fired power stations. The state has already inked MoUs with 29 IPPs envisaging combined generation capacity of 37,000 MW.

Apart from IPPs, developers generating power from coal washery rejects in Odisha would have to share 12 per cent free power with the state in line with the National Hydro Policy of Government of India. In addition to this, such developers would also have to set aside one per cent free power for people of peripheral areas affected by the project.

Last year, the state government had issued a notification, making it mandatory for power plants based on coal washery rejects would have to supply 33 per cent free power to a nominated agency authorized by the state. But the demand for free power had to be scaled down to 13 per cent in the face of opposition from the industry.

The notification was issued on September 8 by the steel & mines department after the decision of the High Level Clearance Authority headed by the chief minister on May 4 last year to this effect. According to the notification, such power plants shall also give an annual contribution at the rate of six paisa per unit of the energy sold outside the state towards Environment Management Fund. The establishment of coal washing plants shall be restricted to coal mining lease area or within close vicinity of mining areas so that the ash generated could be easily used for filing mining voids.