India's NTPC to Construct Power Project in Punjab

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's state-owned power company, NTPC Limited (BSE:532555) (New Delhi), recently signed a memorandum of understanding with the state government of Punjab and the state-operated Punjab State Power Corporation Limited (PSPCL) (Patiala, Punjab), under which NTPC will set up a 2,640-megawatt (MW) thermal power project at Gidderbaha in Punjab. Punjab will obtain about 50% of the power generated by the project. The project is estimated to require an investment of $3.3 billion. This is the largest public-sector investment secured by the state in four decades.

The project will be spread across a land area of about 2,316 acres, the in-principle clearance for which has already been granted. Further, the government of Punjab has issued a notification for the required land. The in-principle clearance for 125 cubic feet per second of water has also been granted.

This will be NTPC's first project in Punjab. The company will fund the development of all four of the 660-MW units. NTPC has also requested the Ministry of Coal for a long-term coal linkage for the project.

PSPCL will provide NTPC with all of the investigative reports related to preparing the project feasibility report, including the environment impact assessment report. NTPC will reimburse PSPCL for the costs of preparing the reports. PSPCL will sign a power purchase agreement with NTPC whereby PSPCL will purchase the allocated power from the project. India's Central Electricity Regulatory Commission (New Delhi) will determine the power tariff.

The proposed coal based power project will be the state's largest thermal power project to date and is expected to create thousands of employment opportunities, in addition to boosting the development of several ancillary industries.

The state of Punjab has an existing power generation capacity of about 3,763 MW. Of this, 2,620 MW is from thermal sources, while the remaining amount is from hydroelectric sources. In June 2010, the state cabinet of Punjab approved the state's Power Generation Policy 2010, which strives to transform Punjab to a power-surplus state from its existing deficit status and ensure that consumers are supplied with reliable power at an affordable cost. The policy aims to reduce the cost of power, encourage the development of power projects by the private sector, and support and promote all ancillary industries connected to power projects.

NTPC currently has an installed power generation capacity of more than 32,000 MW spread across 27 power stations. Another 17,000 MW of capacity is under construction across 17 projects in 12 states. NTPC plans to have an installed power generation capacity of 75,000 MW by the end of India's 12th Five-Year Plan (2012-17).

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