Environmental Issues Force Orissa Thermal Power Corporation to Relocate Proposed Power Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Stringent guidelines imposed by India's Ministry of Environment and Forests (MoEF) regarding coal block allocations for thermal power projects has forced the Orissa Thermal Power Corporation Limited (OTPCL) (Bhubaneshwar, Orissa) to identify an alternate site for the company's proposed 2,000-megawatt (MW) power project.

OTPCL, which is a joint venture of the Orissa Mining Corporation (Bhubaneshwar, Orissa) and Orissa Hydro Power Corporation (Bhubaneshwar), was established in January 2007 to construct the proposed 2,000-MW power plant at Rengali in the Angul district of Orissa. The Kaniha coal block was allocated to the project. However, the MoEF recently raised objections about the coal block allocation, claiming that the coal mine was located in a "no go" area.

OTPCL had identified Rengali as the location of the power plant, and about 1,000 acres of government land had also been assigned for the project. According to Atanu Sabyasachi Nayak, Orissa's Energy Minister, the project will require about 2,000 acres of land. Land assessment activities have started at Kamakhyanagar, and the acquisition procedures will begin in December. Coal is likely to be procured from the Mandakini-B and Biatarani West coal blocks, which have been allotted to Orissa Mining Corporation and Orissa Hydro Power Corporation, respectively. The power plant is expected to begin operations in 2015. Nayak also indicated that the electricity generated from this power plant would be connected to the state grid. There will be no third-party power supply agreements.

OTPCL has invited bids for infrastructure development for the Kamakhyanagar project. The infrastructure activities, which will be completed in a year, will include preparation of the Environmental Impact Assessment report, a detailed feasibility report, land acquisition, water management, site finalization, resettlement and rehabilitation, coal transport system and other clearances. Bids for civil and engineering, procurement and construction (EPC) works will be accepted after the infrastructure development procedures are completed. Sources have indicated that OTPCL is holding talks with Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi) for the design and supply of power equipment. According to S.S. Dalpati, the general manager of the project, the Kamakhyanagar power plant will help Orissa achieve 30,000 MW of power generation capacity by 2012. Several private-sector power projects and the 4,000-MW ultra-mega power project in the Sundergarh district are expected to help the state generate surplus power of 10,000 to 15,000 MW.

The MoEF and the Coal Ministry have been at loggerheads after the MoEF released a list of "no go" regions. The MoEF indicated that coal mining could not be authorized in the designated "no go" areas, as it would adversely impact biodiversity, wildlife, and flora and fauna in the region. Several power projects are in a limbo after the ministry cancelled mining licenses under this policy.

The coal ministry has expressed concern that nearly 150 coalmines, which have been allocated to power producers, have been classified as "no go." The ministry has requested assistance from the government to clear 90% of these mines. According to Shri Prakash Jaiswal, India's Minister of Coal, because of the MoEF's stringent guidelines, India will face coal fuel shortages of 500 million tons in the next few years. Power projects proposed by several companies, including Adani Power Limited (BSE:533096) (Ahmedabad, Gujarat), NTPC Limited (BSE:532555) (New Delhi), Hindustan Zinc Limited (BSE:500188) (Udaipur, Rajasthan) and the Essar Group (Mumbai) have been stalled because of environmental issues.

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