Nalco, NLC India to build 1,080 MW power plant with ₹12,000 cr investment

The 1,080 MW thermal project in Odisha will supply electricity for Nalco's aluminium smelter expansion while integrating renewable energy and long-term coal supplies

State-owned National Aluminium Company Ltd (Nalco) has partnered with NLC India Ltd (NLCIL) to set up a 1,080 megawatt (Mw) captive thermal power plant at Odisha’s Anugola. The project, to be developed at an investment of around ₹12,000 crore, will secure power for Nalco’s ambitious aluminium capacity expansion.

 

The two Navratna public-sector companies signed a joint venture-cum-shareholders’ agreement on Wednesday to establish a 50:50 joint venture company that will develop a 4x270 Mw captive thermal power plant within Nalco’s existing captive power complex in Anugola (formerly Angul).

 

The project is crucial as Nalco is undertaking a 0.5 million tonne per annum (mtpa) expansion of its aluminium smelter at Anugola at an estimated cost of ₹30,000 crore. The expansion, scheduled for commissioning in 2030-31, will require an additional 800 Mw of uninterrupted captive power, as aluminium smelting is among the most electricity-intensive industrial processes. Nalco said the new power plant has been conceived primarily to meet this requirement, ensuring a reliable and cost-effective electricity supply for the expanded smelting operations. 

   

The captive power station will be developed in phases as a brownfield expansion within Nalco’s existing power plant premises, allowing the company to leverage existing land, infrastructure and utilities while reducing execution time and costs.

 

With an installed capacity of 1,080 Mw, the plant will not only meet the immediate power requirement of the upcoming smelter expansion but also provide operational flexibility for future growth.

 

“Under the agreement, the joint venture company will enter into a 25-year power purchase agreement (PPA) with Nalco for 100 per cent of the electricity generated by the plant and a long-term fuel supply agreement with NLCIL for coal at Coal India notified prices,” Nalco said in a statement.

 

Sources said NLC India will leverage its mining expertise and coal resources, including production from its Machhakata coal mine in Odisha, located near the Anugola project site, to ensure uninterrupted fuel supply throughout the plant’s operational life.

 

The long-term arrangement will assure power availability for Nalco while providing a stable revenue stream for the joint venture. Since power accounts for nearly 35-40 per cent of aluminium production costs and is a key determinant of competitiveness, the captive plant will help Nalco shield itself from fluctuations in electricity tariffs by reducing reliance on market purchases.

 

The partnership also aligns with Nalco’s clean energy roadmap. The company plans to procure 200-250 Mw of firm renewable energy to meet renewable consumption obligation (RCO) norms. NLC India will facilitate this through long-term power purchase agreements or group captive arrangements from its renewable energy portfolio, helping Nalco reduce the carbon footprint of its aluminium production while meeting regulatory requirements.

 

The agreement was signed in New Delhi on Wednesday in the presence of Union Coal and Mines Minister G Kishan Reddy, Sanoj Kumar Jha, additional secretary in the ministry of Coal and in-charge chairman & managing director (CMD) of NLCIL, and Nalco CMD Brijendra Pratap Singh.

 

The agreement follows a non-binding memorandum of understanding (MoU) signed earlier by the two companies, which laid out the broad framework for collaboration in thermal and renewable energy projects and long-term coal supply.