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Old power plants to make way for newGen units

The government has cleared the way for replacing old and ageing thermal power plants with new generation energy efficient super critical technology by operationalising a new policy that will allow seamless transfer of fuel linkage in case of scrapping of old power units and replacing them with new super critical plants.

The move will benefit close to 20,000mw of ageing power plants of NTPC and other state generation utilities, helping them replace these inefficient units with new, bigger plants on the same site with assured coal supplies.

The first such approval has already been given to the Panipat thermal power station (TPS) in Haryana, where the existing coal linkage has been transferred to the new super critical plant to be set up at the same location.

“The new policy would not only offer lifeline to pr­ojects looking for an overhaul but will also support green initiative of the power ministry where the plan is to shift completely to super critical technology by 2022. This will encourage better technology and production efficiency,” said an official privy to the development.

Linkages granted to an old unit shall be automatically transferred to the new plant of the nearest super critical capacity.

If the capacity of the new super critical plant is higher than the old plant, additional coal may be accorded priority subject to the availability of coal on the best effort basis from Coal India (CIL). The additional coal would be provided on the basis on an annual MoU and not long-term fuel supply agreement (FSA).

Moreover, the retiring unit’s capacity should not be less than 50 per cent of the proposed replacement units. The new policy will be applicable to pre-NCDP (new coal distribution policy) plants in public sector only, which have already been granted long term linkages or letter of assurance (LoA).

Automatic transfer of LoA would be allowed only when the new plant is set up within the state in which the old plant was located and the old plant is actually scrapped.

The old plant will be allowed to operate only till the commercial operation date (Cod) of new plant.

The move for seamless transfer of fuel linkage between units of the same project has been proposed at the instance of several state generation utilities.

Power sector advisory body Central Electricity Authority (CEA) received requests from Haryana Power Generation Corporation, Madhya Pradesh Power Generation Corporation, and Gujarat State Electricity Corporation for transfer of coal linkage of old retiring units to new, bigger replacement units.

Close to 20 per cent of NTPC’s power generation capacity of 44,500mw comprises units that are over 30 years old and need urgent replacement.

A NTPC official said that, on numerous occasions, the company had gone for renovation and retrofitting to extend the life of these units, rather than taking the replacement route due to lack of clarity over fuel linkage. This has not only reduced efficiency of plants, but also increased pollution.

“Many of our old plants are running at 90 per cent to 95 per cent plant load factor. If these are to be replaced, assurance on fuel supply is of utmost importance so that consumers do not suffer,” said the official.

source: http://www.mydigitalfc.com