India's Singareni Collieries to Build 1,200-Megawatt Maiden Power Plant in Andhra Pradesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--Singareni Collieries Company Limited (SCCL) (Kothagudem, Andhra Pradesh), a state-owned mining utility, has decided to foray into commercial power generation as the next step in the company's progress in the energy chain. The country's second-largest coal producer is planning to set up a 1,200-megawatt (MW), coal-fired thermal power plant in Jaipur Mandal at Adilabad, in the Telangana district of Andhra Pradesh.

SCCL will invest about $1.2 billion in a phased manner over the next four years to establish two 600-MW units, the first of which is expected to be completed by 2012. Funding for the project will be done through a mix of debt and internal investments. The plant will be fully operational in 2014.

SCCL has secured the necessary land and water resources required for the first stage of the project, in addition to obtaining environmental clearance for the venture. Coal feedstock for the Adilabad pithead power plant will come from the company's open-cast mines, which are about 12 kilometers from the plant. An abandoned mine in Srirampur reportedly has been revived for the purpose, with about 2.5 million tons of coal per year likely to be mined from this resource. The plant will require 5 million tons of electricity-grade coal every year.

Power generating equipment for the venture is likely to be supplied by state-owned Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi). SCCL was earlier reported to be in talks with BHEL to finalize the equipment supply deal.

SCCL also plans to enter into a long-term power purchase agreement with individual distribution companies and the Transmission Corporation of Andhra Pradesh Limited (APTransco) for offtake of power generated at the plant.

SCCL's annual coal output averages about 43 million to 44 million tons, while the target for the current fiscal year ending March 31, 2010, has been set at 50.4 million tons.

The state of Andhra Pradesh, which is already faced with power shortfalls due to natural calamities as well as peak load problems during summer, will gain a stable source of power from the venture. Several thermal power ventures and a nuclear project have been envisaged in the state.

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