Essar Mahan plant's 600 MW unit resumes power generation

Essar Power today said its first unit of 600 MW capacity at Mahan project in Madhya Pradesh has resumed commercial production after a gap of 17 months after the company made available 3 lakh tonnes of coal through e-auction.
"Essar Power Ltd has resumed the commercial operations of Unit I of the 1,200 MW (2x600 MW) Mahan power plant. Essar Power MP Ltd, the operator of the plant that is located in the Singrauli district in Madhya Pradesh, has secured 3 lakh tonnes of coal through a government conducted special forward e-auction," the company said in a press release.
Mahan's Unit-I began commercial operations in April 2013 but had to suspend operations because of non-availability of coal.

The Mahan plant was linked to the Mahan Coal Block, and the company had applied for tapering coal linkage in May 2011 - an issue that was taken up in the SLC (Standing Linkage Committee) meeting in August 2014.
However, after the de-allocation of the Mahan Coal Block and subsequent allocation of Tokisud North under the auction route, the company has now requested for grant of tapering linkage from the nearest colliery, Northern Coalfields Ltd.
According to statement, Essar Power MP won a captive coal mine in Tokisud in Jharkhand state in the recent coal auction. Essar has invested over Rs 10,000 crore in the 1200 MW Mahan plant which requires an estimated 5.5 million tonnes of domestic coal per year and the Tokisud captive coal mine.

The decline in coal prices and captive mines will enable Essar Power to fulfil its commitment to supply affordable power to the nation. The company has long-term power purchase agreements and is in the process of securing more such commitments, it said.

"We are thankful to the government for making coal available through e-auctions and aligning coal prices to the current market scenario. It has increased the production and supply of coal, which is a welcome move for the power sector and will help other stranded power projects," Essar Power Executive Vice Chairman Sushil Maroo said in a statement.
K V B Reddy, CEO of Essar Power and Essar Power MP Ltd, said, "We are optimistic that with the availability of coal, the Mahan plant will now run optimally on a sustained basis. We are also confident of commissioning Unit II by September this year."

The Centre's UDAY (Ujjwal DISCOM Assurance Yojana) scheme provides opportunities for private sector power companies to sign PPAs with the states that have joined the initiative. This will go a long way in meeting India's objective of affordable round-the-clock power by 2019, the company said.