Trying to strike a balance between clean and conventional energy, government today set a target of 1.75 lakh MW from green power as also plans to set up 5 UMPPs entailing investments of about Rs 1 lakh crore.
Finance Minister Arun Jaitley, in his first full-year Budget for 2015-16, said: "Five more ultra mega power projects (UMPPs), under the plug and play model will be set up with total investments of Rs 1 lakh crore." UMPP is a coal-fired power plant that has 4,000 MW generation capacity.
Jaitley also announced renewable power production target of 1,75,000 MW by the year 2022.
Of this, solar power will have a lion's share of 1,00,000 MW, followed by 60,000 MW from wind energy, 10,000 MW biomass energy and 5,000 MW of small hydro projects.
As for pushing UMPPs, Jaitley said that under the "plug and play" system, coal blocks will be auctioned after they are granted various clearances to speed up and simplify mining and get better valuation.
The proposal for setting up the thermal plants follows government's scrapping price bids for two proposed UMPPs -- Bedabahal (Odisha) and Cheyyur (Tamil Nadu). The bids were cancelled as they received tepid response from the private sector and funding issues raised by bankers.
The Power Ministry has now appointed a panel which is reviewing the situation and examining the documents to determine if the methodology adopted at the time of tendering these projects was fair.
One of the proposed UMPPs is likely to be set up in power starved state of Bihar. The proposed plant in Bihar may be fed from a mine either in Jharkhand or Odisha.
Power Minister Piyush Goyal had said in November that sufficient number of coal blocks will be allotted for the purpose.
Power Finance Corporation (PFC) is the nodal agency for UMPPs in the country.
So far, 4 UMPPs have been awarded, of which Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) have been bagged by Reliance Power. Tata Power is operating the Mundra UMPP in Gujarat.