Anil Ambani group company Reliance Power has sought the Centre?s approval for diverting excess coal worth an estimated 24 million tonne (MT) from the captive mines of its Tilaiya ultra mega power project (UMPP) to other power projects that the company hopes to win in Jharkhand. The company has said it would enhance its investment in the Jharkhand power sector from Rs 20,000 crore envisaged for the UMPP to Rs 50,000 crore if the coal diversion is allowed.
Reliance Power?s proposal is despite the fact that Tata group has taken it to court over a similar permission the ADA group company had secured for diverting incremental coal from the captive mines of its UMPP at Sasan in MP. The Supreme Court is likely to commence the final hearing on the matter in July.
ADA group president AN Sethuramanthe urged power minister Sushilkumar Shinde in a letter to take up the matter with the empowered group of ministers (EGoM) on UMPPs. Sethuramanthe said that the entire additional investment in Jharkhand would be made in the 12th Five Year Plan period.
The company has agreed that power generated by utilising incremental coal would be sold through tariff-based competitive bidding as was agreed even for the Sasan UMPP. In addition, it agreed that diversion of coal will not be at the cost of Tilaiya project that will get overriding priority over coal produced from the two captive blocks. While the Tilaiya UMPP has a size of 4,000 MW, the additional capacity proposed to be built in Jharkhand by Reliance Power is 6,000 MW.
Captive coal mines are currently given to specific end users. Current policy requires that surplus coal from such blocks is transferred to the nearest Coal India (CIL) subsidiary at a price determined by the coal controller (at lower-than notified price, which is already 40-50% lower than market price). In some special cases, however, coal ministry allows sale of excess coal on a temporary basis.
Diversion is not permitted as a rule but it can be allowed with prior government approval. When contacted, a Reliance Power spokesperson declined to comment on the matter. ?It is our constant endeavour to optimise the utilisation of our existing resources across all our projects to create and enhance the value for our stakeholders,?? he said. Development of the Tilaiya coal mine is expected to cost R7,500 crore. Other private power companies are not happy with the Reliance Power proposal. ?It (diversion of excess coal) goes against the principle of equity as it will disturb the level playing field for other power generation companies by denying them the opportunity to use additional coal (from Reliance Power mines) for their projects. But if diversion is being allowed as a rule by the government, that option should be available to other power project developers also,? said another private sector power developer asking not to be named. Tilaiya UMPP has been allotted Kerandari B and C blocks in North Karanpura coalfields for captive use of the power project. While the UMPP will require only 16 million tonne of coal, the mining plan finalised by Reliance Power and approved by the coal ministry suggests that the captive blocks may generate 40 million tonne. Reliance Power has said that it will use the latest in-pit crushing and conveying technology to enhance production from the block that will help in augmenting domestic coal production. This will also aid power capacity addition that will immensely benefit states in the north, west and east, the company?s letter mentions. The two coal blocks have already got first stage environment clearance and fall in the ?go-area? designated by environment ministry, giving it the flexibility to start mining once all permissions are obtained. RPL has been the biggest gainer of the government?s UMPP programme, so far bagging three of the four such projects bid out.
It has bagged UMPPs at Sasan, Tilaiya and Krishnapatnam. The company on its own and through subsidiaries has a portfolio of 37,000 MW of power generation capacity, both operational as well as under development. Apart from coal-fired projects, it has under its belt gas power projects and a few hydro power projects. It also intends to enter nuclear power generation once the sector is opened for private investment.