 "NTPC")
Meja Urja Nigam Ltd (MUNL), a 50:50 Joint Venture (JV) between India’s largest power generator NTPC Ltd, and Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL), plans to build 5.6 gigawatt (Gw) of coal-based power generating units in the coming years to meet the rising demand.
UP’s plan to set up a new thermal unit in the state comes after a hiatus of nearly 10 years. This also indicates a comeback of coal-based power units with states looking to set up mega plants in their backyard as demand crosses record highs.
Post Covid-19, the power demand of India’s largest state Uttar Pradesh has increased this year even surpassing the levels of typically higher demand industrial states such as Maharashtra, Gujarat, Tamil Nadu etc. This year in August and September, when the national peak power demand touched a record high of 240 Gw, UP was leading with the highest demand hovering around 25-28 Gw.
MUNL, which currently operates a 1.32 Gw thermal power project in Meja district of UP, is looking to add three more units totalling 2.4 Gw at Meja. The two existing units became operational in 2019 and 2021, respectively. The UP Cabinet recently approved the 1.6 Gw capacity Obra D power project which would be constructed by MUNL. Similar capacity at Anpara E is also under process to be built by MUNL.
Speaking with Business Standard, Sunil Kumar, CEO, MUNL, said that the cumulative capacity of 5.6 Gw to be constructed by the company shows the confidence of the state government in MUNL’s performance and the growing need for affordable electricity. He said, that with this planned capacity, MUNL would become the largest JV of NTPC with any state government. Kumar did not indicate a timeline for their commissioning as the board approval for the same is pending.
NTPC has 10 JVs with various state governments, or state-owned utilities, with a cumulative operational capacity of 10.5 Gw. There is an additional 9.3 Gw of capacity under consideration with these JVs, according to the annual report of NTPC. Among these JVs, NEEPCO, which NTPC acquired in 2020, is the largest with 2 Gw of operational capacity.
“In recent times, there has been a significant increase in the power demand of the state. It is the largest state, but the enhanced electricity connections and rise in commercial demand due to economic uptick have created the need to build more power plants in the state. A major part of this capacity addition is coming to us,” Kumar said.
The plans of MUNL and UP state government reflect the growing demand for coal-based power as states face rising electricity demand. With the growth in renewable energy capacity falling behind the growth of electricity demand, states are going back to coal to build future power capacity. More in-house power projects ensure the cost of electricity remains lower. Kumar said that the unit has coal supply agreements with three subsidiaries of national miner Coal India Ltd and they are supplying “affordable power to the state of UP”.
He added that the company has changed its strategy to ensure the timely construction of projects with necessary emission standards in place. “Unlike earlier when we used to award 40 different contracts, we now award a single engineering, procurement, and construction (EPC) tender. This has also evinced the interest of global players as well,” he said.
The thermal EPC segment, which was restricted to state-owned utility BHEL, has seen the entry of several global players such as GE, Toshiba, Hitachi etc in recent years. The growing need for electricity and dependence on coal-based power generation has been a driving factor.
Kumar said with more EPC players, the company is able to deploy the latest technologies such as supercritical power units, Flue Gas Desulphurisation (FGD), which ensures efficiency in operations and emission control. “All new thermal units in the country are being built on supercritical technology. As against sub-critical, where efficiency is around 35 per cent, in supercritical, it is more than 40 per cent,” he said.
Supercritical power units use less fuel and water to produce more electricity as compared to sub-critical units and also have lower emissions. FGD is a retrofit in older units and induced technology in upcoming units which cleans up sulphur from the emissions coming out of the thermal power units.
MUNL, like most state-owned power units, follows a cost-plus model in tariff declaration where it passes through all the costs incurred on electricity generation. This year the Union government had mandated all thermal power stations to mandatorily import coal up to 6 per cent of their fuel requirement. Kumar said that imported coal procurement had a minimal impact on the tariff at which they sell to their procurers. MUNL supplies the bulk of its generation to UP and the balance to Uttarakhand, Punjab, Rajasthan, Madhya Pradesh.
