New Delhi: An empowered group of ministers, or eGoM, will meet on Thursday to decide on whether it should permit Reliance-Anil Dhirubhai Ambani Group, or R-Adag, to use surplus coal from captive blocks for one project to power another.
The problem is that the captive blocks have no surplus coal, according to two government officials.
The ministerial group’s definition of “surplus” isn’t known —it could either be the coal left over when the 4,000MW power plant at Sasan in Madhya Pradesh, for which it is meant, is running to capacity, or it could mean the coal left over after use by the plant, irrespective of whether it is operating to capacity or not.
If it is the latter, Reliance Power Ltd, the R-Adag firm developing the Sasan plant, has another 4,000MW power plant at Chitrangi, also in Madhya Pradesh, that can use the surplus coal. A request to allow the firm to do so has been made by the chief minister of Madhya Pradesh to the Prime Minister, according to the minutes of the previous meeting of the ministerial group that has been reviewed by Mint.
The Sasan plant is one of the so-called ultra mega power plants bid out by the Union government, while the Chitrangi plant is being set up in association with the state government. Reliance Power has agreed to sell power generated at Sasan at Rs1.19 a unit, while it plans to sell the power generated at Chitrangi at Rs2.45 a unit.
An R-Adag spokesperson did not respond to questions mailed by Mint.
The meeting of the ministerial group on Thursday may be the first after the government won a crucial trust vote in Parliament on 22 July with support from the Samajwadi Party, or SP. One of the party’s leaders, Amar Singh, is known to be close to R-Adag chairman Anil Ambani.
“We haven’t put any pressure on the UPA (United Progressive Alliance) government to help Reliance supply excess coal from Sasan to other projects,” said Mohan Singh, a SP member of the Lok Sabha.
The ministerial group’s decision does not need to be ratified by the cabinet.
Three captive coal blocks have been identified to supply fuel to the Sasan project (14 million tonnes per annum, or mtpa, for a period of 25 years) and, according to a senior Central Electricity Authority, or CEA, official who did not want to be named, “there is no possibility of any excess coal...”
According to the official, two of the blocks can produce a maximum of 12mtpa of coal, and the third is a very small block. The 12mtpa number was confirmed by a senior coal ministry official who did not wish to be named.
CEA is India’s apex power sector planning body, and the CEA official added that “coal blocks for the UMPPs are captive to the project and cannot be used for other purpose”, a view seconded by Anish De, chief executive officer at Mercados Asia, an energy consulting firm.
“The project developers have been asking for use of surplus coal for the other project. If there is extra coal, it can be given to other projects, provided that power (generated out of the project) is sold on competitive bidding basis,” said power minister Sushil Kumar Shinde, one of the members of the ministerial group.