Faster green signals for power plants on cards

Written by Kirtika Suneja | Subhash Narayan | New Delhi | Updated: May 4 2014, 04:46am hrs
PowerMove to delink environment nod for super critical plants, coal mines
To give an impetus to capacity addition in the thermal power sector, the government will soon do away with the condition of giving environmental clearance for super-critical power plants only if their captive coal mines have already got forest and environment clearances (FCs and ECs).

The move to delink the two environment clearances will fast-track a large number of power plants with a combined planned capacity of 40,000 MW.

While state-run NTPC will be the main beneficiary, some state utilities and private players like Visa Power, Essar Power, Jaypee Group, Jindal Power, DB Power and Lanco will also benefit from the proposed relaxation.

Since these projects have mostly tied up their coal supplies thanks to the government-initiated fuel supply agreements (FSAs) with Coal India for capacities aggregating to 78,000 MW even if the approvals for captive mines get delayed a bit, the construction of the power units can now commence.

In the case of ultra-mega power projects (UMPPs), the environment clearances for power plants and coal mines are already de-linked. The extension of this facility to all super-critical stations is expected to reduce the gap between the targeted capacity addition of 88,000 MW for the 12th Plan and the likely accomplishment, analysts said.

Sources in the ministry of environment and forests said the new relaxed rules have been finalised and would be notified soon.

The Veerappa Moily-led ministry had earlier offered this special dispensation to UMPPs by delinking their green nods from ECs and FCs of their captive coal blocks. We have received requests from public and private companies for de-linking of the clearances, said a ministry official.

Currently, work on end-use projects (cement, steel, power) can be started only after both green nods EC and FC are given to both the project and its captive mine.

However, the new relaxed regulation is being implemented only for super-critical projects as they are considered more efficient and less environmentally polluting than other plants. Incidentally, the same logic was behind easing the green clearance process for UMPPs.

It is important that the government provides clarity over the processes to be followed for getting green nod for mining projects. Unless this is ensured, promoters will not risk investments and would wait for all clearances before committing capital, said Kalpana Jain, senior director, Deloitte.

Power plants like the 1,320-MW Shree Singaji Thermal Power Project being developed by Madhya Pradesh Power Generating Company, NTPC's 1600-MW Gadarwara project, its Barethi and Khargone projects (each with 1,320 MW capacity) in Madhya Pradesh, its 1,600-MW Kudgi project in Chhattisgarh and 2,400-MW Lara project in Karnataka have sought the relief. Several state utilities, including Maharashtras Mahagenco, UPRVUNL, Chhattisgarhs CMDC have also approached the ministry for this relaxation.