Conditional green waiver for Orissa UMPP likely

Conditional green waiver for Orissa UMPP likely

New Delhi: The ministry of environment and forests (MoEF) has signalled its readiness for a compromise that would allow coal mining to fuel a 4,000MW power plant in Bedabahal, Orissa, in an exception to the “no-go" policy that seeks to protect forests.

Jairam Ramesh, minister for environment and forests, said the ministry has been involved in detailed discussions with the Union power ministry and the Orissa government to work out a compromise. Bedabahal is the site of one of the so-called ultra mega power projects (UMPPs) that have a capacity to generate around 4,000MW of power.

“I’ve given them two options towards a compromise," he said. “Either you can try reducing the size of the UMPP or we can redefine the boundaries of the no-go coal block."

Loading video...

In June 2009, MoEF and the coal ministry announced the concept of “go" and “no-go" areas for coal mining. While the move was made to ensure protection of India’s best-quality forests, it also raised concerns that it would impede efforts to meet the growing demand for fuel in an energy-short economy.

Failure to get the environmental go-ahead forced Power Finance Corp. Ltd, the nodal agency for awarding UMPPs, to extend four times the deadlines for companies to respond to the “request for qualification", or RFQ, which would indicate their intention to compete for the project.

A project proposed in Surguja, Chhattisgarh, has been caught in a similar situation. The new deadline for submission of RFQ applications for the Orissa project is 31 January and for the Chhattisgarh project 6 January.

Ramesh argued that the size of the project should be open to calibration depending on circumstances even as he categorically ruled out a similar exemption for the Chhattisgarh project. “What is so sacrosanct about the 4,000MW number? Why does it have it to be that particular number and not 3,000? Hasdeo-Arand (Chhattisgarh) will continue to be completely off limits. Everything cannot be allowed in the name of expedience," he said.

“The problem with the Chhattisgarh UMPP still remains," confirmed a power ministry official, who didn’t want to be named.

Nine UMPPs were originally planned and so far projects at Mundra in Gujarat, Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand have been awarded.

India plans to eventually set up seven more projects that have a generation capacity of 4,000MW at a cost of 20,000 crore each, taking the total number of such projects to 16.

Large power projects are crucial for the country’s efforts to boost generation capacity to meet demand for power in a rapidly growing economy. India has a power generation capacity of 164,000MW and expects to add 62,374MW by 2012.

Ramesh cited the recent example of a compromise with the civil aviation ministry that paved the way for the construction of an airport in Navi Mumbai. “Our Navi Mumbai strategy shows that it pays to be dogmatic initially. Only then can a compromise be agreed upon later," he said.

The power ministry official cited above confirmed that discussions were under way on the Orissa project. “We’re hopeful that a way will be found out shortly," he said. “We’re quite hopeful about awarding the Orissa UMPP as out of the three coal blocks being allocated for the captive mining, there is problem with only one block."

Coal accounts for at least 50% of India’s commercial energy consumption and around 78% of domestic coal production is dedicated to power generation. Out of India’s 270 billion tonnes of coal reserves, 30% is in Jharkhand, 25% in Orissa and 20% in Chhattisgarh. The states also have high forest cover: 30% of Jharkhand’s area is made up of forests and the proportion for Orissa and Chhattisgarh is 37% and 44%, respectively.