Power Ministry mulling one UMPP per state

The government may give one ultra mega power plant with a generation capacity of 4,000 megawatt to every state after the state governments evinced overwhelming interest in the scheme aimed at cutting down electricity deficit.

"A large number of states have requested for UMPPs to deal with the demand and supply mismatch. The ministry is evaluating the proposals to plan at least one UMPP for each state," a senior power ministry official told PTI.

He said, "Before including all states in the UMPP plan, the ministry has to evaluate many things, primarily fuel and water availability. Apart from this, the important considerations are social as well as environmental costs."

These projects are either set up at pit head or coastal location where the fuel is available in abundance or can be imported easily.

Earlier, the government had planned nine UMPPs and later increased the number to 13 considering the demand. The government has already alloted four such projects.

The government wants to ramp up power generation capacity by more than 50,000 MW during 12th Five-Year Plan (2012-17) through UMPPs as all such projects are slated to be commercially operational during the Plan period.

Reliance Power bagged three UMPPs at Sasan (Madhya Pradesh), Tilaiya (Jharkhand) and Krishnapatnam (Andhra Pradesh). Tata Power is developing one such project at Mundra in Gujarat.

The government has approved sites at Cheyyur in Tamil Nadu and Bedabahal in Orissa for UMPPs as recommended by the states.

State-run Power Finance Corp is the nodal agency for UMPPs and facilitates the process of selection of developer.

These projects entail an investment of around Rs 18,000 crore at a debt-equity ratio of 70:30.

The financial closure for Mundra UMPP was done by Tata Power in April last year. Reliance Power is expected to complete the financial closure for its Sasan and Krishnapatnam projects in this calender year.