UMPPs can use allotted coal for other projects

Extra coal from blocks allotted for an ultra mega power project (UMPP) may also be used by the developer for other projects.

The empowered group of ministers (EGoM) on the subject, headed by Finance Minister Pranab Mukherjee, had approved such incremental use, on January 15. The decision was challenged by Tata Power in the Delhi high court, which dismissed the petition.

Tata Power is developing a 4,000-Mw UMPP at Mundra in Gujarat on imported coal. The EGoM decision would primarily benefit Reliance Power, which has so far bagged three UMPPs. While their Krishnapatnam UMPP in Andhra would be developed on imported coal, those at Sasan and Tilaiya, in Madhya Pradesh and Jharkhand, respectively, would use indigenous coal.

Power ministry sources told Business Standard the EGoM’s nod came after the coal ministry gave its consent.

Reliance Power sources welcomed the EGoM’s decision. The Anil Ambani-led company has been awarded coal mines with reserves in excess of two billion tonnes for Sasan and Tilaiya UMPPs. Reliance Power can set up domestic coal projects of 8,000-Mw over and above the two UMPPs at Sasan and Tilaiya, with the use of incremental coal from coal mines allotted to it.
 

INCREMENTAL USE

* EGoM on UMPPs had approved incremental use of coal on January 15

* The decision was challenged by Tata Power in the Delhi High Court, which dismissed the petition

* The move would primarily benefit Reliance Power, which has so far bagged three UMPPs

* The EGoM’s approval comes after the coal ministry gave its consent

* Reliance Power has been awarded coal mines with reserves in excess of 2 bn tonnes for Sasan and Tilaiya UMPPs

* The company has already planned a 4000-Mw project near its Sasan site

A Mumbai-based analyst, who did not want to be quoted, said: “With the current ‘Case 1’ bidding tariffs hovering about Rs 3 per unit, this combined portfolio based on domestic coal has possibly the highest returns for Reliance Power, as compared to any other developer.”

Reliance Power has already planned a 4000-Mw project near its Sasan site. The bulk of the land for this project, known as Chitrangi, has been acquired and made many of the needec clearances are also through.