Mahagenco to source ‘affordable’ coal for private power plants

Nagpur: The state government has decided to give a helping hand to private power plants by making Mahagenco source coal for them. These plants will sign agreement with the state-run company and sell power to it. Mahagenco will in turn sell this power to its sole consumer MSEDCL. A government resolution (GR) in this regard is expected to be issued soon. A large number of private plants in the state have closed down or are running at part capacity due to lack of coal and buyers.According to energy minister Chandrashekhar Bawankule, the state needs additional 5,000MW by 2022. “Instead of spending thousands of crores on new units, the government has decided to make use of the existing power plants,” he told TOI.
“About 4,000MW capacity plants in private sector are either lying idle or partially utilized. Supreme Court (SC) has cancelled the allocations of their coal blocks. However, Mahagenco has been allocated a major block in Chhattisgarh. So we will use that coal for the private plants. Mahagenco will sign power purchase agreements (PPAs) with these plants for buying power from them. We will only entertain those companies which agree to supply power at affordable rates. This way MSEDCL will get cheap power and it will help in bringing down the power tariff,” the minister said.
There are seven power plants in the state having total capacity of 3,996MW, which are in bad shape. They include 1,350MW Rattan India (Nasik), 600MW CESC Dhariwal (Chandrapur), 600MW GMR (Warora), 120MW Gupta Energy (Chandrapur), 540MW Ideal Energy (Bela, Nagpur), 540MW Wardha Power (Warora) and 246MW Abhijeet Power (Mihan).
There are another four private plants, but they have coal linkages and have signed PPAs, hence they are not facing an existential crisis. The 3,300MW Adani Power (Tiroda), 1,350MW Rattan India (Amravati), 1,200MW JSW Energy (Jaigad, Ratnagiri) and 600MW Reliance (Butibori) are the four running private power plants.
A Mahagenco engineer said many of the company’s units were more than 30 years old and had to be retired soon. “We will divert the coal sanctioned for these units to our new ones as well as for those private plants that sign an agreement with us,” he said.
“Many private companies set up plants without long term coal linkage and long term PPAs which has led to the grim situation. Ultimately, it is the common man, who will suffer if these plants turn non-performing assets,” he added.