NTPC to Commission Simhadri Unit 4 by End of February

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Researched by Industrial Info Resources (Sugar Land, Texas)--Notwithstanding incessant delays in civil work and the supply of equipment, India's state-owned power major NTPC Limited (BSE:532555) (New Delhi) is set to commission the third 500-megawatt (MW) coal-fired thermal power unit at the company's Simhadri thermal power station by the end of February 2011, at least three months ahead of the original schedule. Commissioning of this unit will be followed by the fourth 500-MW unit, which is expected to be on-stream by June 2011.

Despite all the delays, NTPC has not incurred any time or cost overruns on this project. The power utility expects to complete the project at an estimated expense of $1.1 billion, rather than the originally anticipated $1.12 billion.

The Simhadri thermal power station, located in the Visakhapatanam district of Andhra Pradesh, has an installed generation capacity of 1,000 MW, commissioned in 2002. The second phase of expansion of the project involves setting up two 500-MW pulverized coal-fired units. Apart from the two new generation units, the expansion project also involves construction of two additional cooling towers and coal-handling plants.

Since its inception in September 2007, the expansion project has faced recurring delays due to its contractors, Bharat Heavy Electricals Limited (BSE:500103) (BHEL)) (New Delhi) and Era Infra Engineering Limited (BSE:530323) (New Delhi). While BHEL is the contractor for the main plant package of the project, Era is responsible for the associated civil work. The coal requirement for the expansion units is estimated to be 5.9 million tonnes per year, compared to the annual consumption of 5.04 million tonnes of coal per year for the Phase-I units.

NTPC has entered into a fuel supply agreement with Mahanadi Coalfields Limited, a subsidiary of Coal India Limited (CIL) (Kolkata, West Bengal), to source the feedstock from the Talcher coalfield area in Orissa. Similarly to units built in the first phase, seawater will be used to cool the condensers, while the freshwater requirement will be met from the Yeleru Canal.

India's state-run transmission major Power Grid Corporation of India Limited (BSE:532898) (Gurgaon, Haryana) is constructing a 400-kilovolt double-circuit line from Simhadri to Visakhapatanam to transmit power from the project. The entire power generated by the first phase units are currently being supplied to the home-state of Andhra Pradesh, as per the guidelines of India's Central Electricity Regulatory Commission (New Delhi).

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