Even as some of its proposed ultra mega power projects (UMPPs) face delays due to various reasons, the government plans to set up another such project in Andhra Pradesh, a state ruled by the Congress party, which also leads the ruling United Progressive Alliance at the Centre.
This is because the state was prompt in issuing clearances for the ultra mega power project at Krishnapattnam that was awarded to Reliance Power Ltd. “The Andhra Pradesh government has sent its proposal to the Union government for the Machalipatnam site, which is near the port. Impressed by the reduced timelines in the case of securing clearances in the case of the Krishnapattnam project, the Centre is positive about the project. Detailed site studies will now be carried out by the Central Electricity Authority (CEA),” a senior Power Finance Corp. (PFC) executive, who did not wish to be identified, said. The official added that among UMPPs, the Krishnapattnam project received clearances in the shortest time from the concerned state.
Growth plan: An NTPC power plant at the Badarpur-Faridabad border. Andhra Pradesh plans to add 8,963MW to its total installed capacity of 11,617.4MW by 2012 at a cost of around Rs35,000 crore.
CEA is the agency that finalizes the locations of the so-called UMPPs, and PFC is the nodal agency responsible for them. UMPPs were conceptualized by the government as a way to address the power shortage in the country and also attract private sector participation in the business.
Each UMPP has a generating capacity of 4000MW and will cost around Rs16,000 crore to set up.
A second UMPP will benefit Andhra Pradesh because according to the UMPP model, the state where the project will be set up will get a substantial part of the power generated. The state’s share of power from the Krishnpattnam project that was recently awarded to Anil Dhirubhai Ambani Group’s Reliance Power Ltd is 1,600MW.
Andhra Pradesh has a total installed generating capacity of 11,617.4MW, of which the state’s power-generation utility, Andhra Pradesh Power Generation Corp. Ltd (APGenco), accounts for 6,760.9MW. The state plans to add 8,963MW of capacity by 2012 at a cost of around Rs35,000 crore.
Power sector analysts say that several power projects will be set up at ports, making them power-generation hubs (with the plants being) run on imported coal or gas. Both fuels are usually transported on ships.
“It is good for the state that an additional project is being considered there. One needs to structure a project so that it is close to the load centre. Today, the demand is in north and west India. In the port-based projects such as these, the port should be clubbed as apart of the project, as port charges will be reasonable, thereby making the tariff more competitive.” said Kuljit Singh, a partner at audit and consulting firm Ernst and Young
This new project would take the number of UMPPs to 12. The projects include Sasan (Madhya Pradesh), Mundra (Gujarat), Tilaiya (Jharkhand), Krishnapattnam (Andhra Pradesh), Cuddalore and Marakkanam (Tamil Nadu), Jharsuguda (Orissa), Girye (Maharashtra), Tadri (Karnataka), and Akaltara (Chhattisgarh).
UMPPs have had their fair share of problems. While the projects at Mundra, Sasan and Krishnapattnam have already been awarded, the Centre is expected to abandon plans to set up UMPPs at Girye, Tadri, and Akaltara.