Govt turns to local coal for 4,000 MW TN power project

The government will use domestic coal for its proposed 4,000 MW power project in Tamil Nadu, instead of imported coal, as power plants need long-term solution for fuel scarcity, power and coal minister Piyush Goyal said on Wednesday.

He said the government has discontinued a two-year-old scheme that offered imported gas at subsidised rates to stranded and underutilised power stations, because of scarcity of gas. This will continue until a long-term solution to the problem of fuel scarcity is found, Goyal added

He said the centre wants to reduce purchases of overseas coal and that the state power minister also has agreed for use of domestic coal for the prosed power project.

Goyal on Monday also said the government would encourage more local solar manufacturing under the Make in India campaign for the solar energy sector that depended heavily on imports of solar panels and modules.

''Those setting up solar manufacturing units should locate them close to NTPC power plants so that power supply is not a problem,'' he said.

Goyal said there was surplus coal production in India with 60 MT of stock with Coal India. He said he encouraged states to shift their plans to domestic coal instead of imported coal.

He said Tamil Nadu has agreed to shelve its imported coal-based ultra-mega power plant at Cheyyur and would set up a domestic coal-based UMPP.

The scheme for importing spot regasified LNG was started in 2015-16 for stranded gas-based power plants and plants receiving inadequate domestic supply of the fuel. The Power System Development Fund provided financial support under the programme.

Companies that got gas in three rounds of auction under it include NTPC, Ratnagiri Gas & Power, Torrent Power, GVK Industries, Lanco Kondapalli, GMR Energy, Gujarat State Electricity Corp, and CLP India.

Under the scheme that was meant to make gas affordable, state governments were required to forego some taxes. Also, gas transporters and import terminals had offered discounts on charges for their services.

The power ministry held two rounds of auction to supply imported gas - for supplies from June 2015 to September 2015 and from October 2015 to May 2016.

Under those, the bidders had to indicate the total incremental electricity they would generate by using the gas sourced from the e-bid and quote the subsidy requirement.