Tamil Nadu to set up 2 LNG power plants

The Tamil Nadu government is planning to set up two 500-Mw LNG-based power plants to address the electricity shortage in the state.

One of the plants would be set up near the five-million-tonne-per-annum Indian Oil Corporation terminal that was set up after a memorandum of understanding was signed. The second plant plans to take advantage of GAIL’s Kochi-Bangalore LNG pipeline, which passes through Tamil Nadu.

Both the projects will attract investments of around Rs 3,500 crore, according to experts.

It was estimated that the capital cost of a natural gas-based station in combined cycle is around Rs 3.5 crore per Mw.

The state, which is facing power cuts between two and 10 hours because of 4,000-Mw electricity shortage, is looking at all possibilities to address the shortage.

Speaking at the Assembly, Chief Minister J Jayalalithaa said the Centre was not providing enough coal for thermal power plants in the state. “So, we have to look at alternative sources like LNG”.

LNG power plants can be built in a shorter time than coal, she added.

According to Crisil, a new LNG-based power plant can be set up in 28-30 months, whereas conventional source, have gestation periods ranging from 48 to 84 months.

The research firm also said dedicated plants operating in open cycle in proximity to load centres can meet peak demand. LNG plants have about 50 per cent lesser emission than a coal-based station. The land and water requirements are also substantially lower.

The state government had on March 22, signed a memorandum of understanding with public sector IOC, which will attract investment of around Rs 10,000 crore.

The state government will look for land as close as possible to the terminal to set up the power plant.