Neyveli Lignite to quadruple capacity in a decade

Public sector power producer Neyveli Lignite Corp (NLC) is set to quadruple its power generating capacity in a decade, according to the company's chairman and managing director Surender Mohan.

Addressing a Republic Day gathering yesterday in Neyveli, Tamil Nadu, the chairman said that new projects in the pipeline would augment the power generating capacity of the company to 11,195 megawatt (MW) from the current level of 2,740 MW in a decade.

Briefing on the status of new projects, he said that the 2 x 250-MW thermal power station (TPS)-II expansion at Neyveli would start commercial operation in February and March. That will increase the installed capacity of TPS-II to 1,970 MW from its present level of 1,470 MW.

NLC Tamil Nadu Power Ltd (NTPL), a new 1,000-MW coal-based power project at Tuticorin, which is a joint venture with Tamil Nadu Generation and Distribution Corp, is scheduled to go on stream soon.

The first 500-MW unit will be commissioned in February, while the second unit of similar capacity would commence operation in May.

It is expected that both the projects combined would add around 1,500 MW of electrical energy to the national power grid in the next few months.

Work is under progress on another 1000-MW new power project at Neyveli, which will replace the ageing TPS-I of the 1960s.

The 600-MW TPS-I is scheduled to be downsized to 300 MW by March 2015 and completely shut down by September 2015.

In replacement, the first 500-MW of the new plant is expected to go on stream in August 2017 with the second unit commencing commercial production in February 2018.

The chairman said that a 4,000 MW coal-based Sirkazhi Thermal Power Project in Nagapattinam in Tamil Nadu is under active consideration and the company is pursuing the land allocation issues with the government.

Other power projects include a joint venture with UP Rajya Vidyut Utpadhan Nigam Ltd to set up a 1,980 MW coal based thermal power plant at Ghatampur for which land acquisition is in progress.

The chairman raised concerns over the increasing cost of power production due to mounting overhead costs, which are well above the norms set by the Central Electricity Regulatory Commission (CERC).

For the September quarter, the power producer reported a 28-per cent slump in net profit at 240 crore compared to 335 crore a year ago quarter, despite a 2-per cent jump in revenue. For the half year, the profit fell 17 per cent, while the income was up 10 per cent.

The production cost could be brought within the prescribed limits only through maximising production in all the units and putting in sustained efforts to implement expansion schemes and to explore new avenues of development, the company said.

In addition to thermal power plants, the company is also venturing into areas such as wind energy and solar power. A 51-MW wind power project in Thirunelveli, Tamil Nadu is expected to commence production this year, while two 10-MW solar power projects are also under active consideration in Neyveli and Barsingsar, Rajasthan.