Ruia led Essar Power Limited resumed the commercial operations of Unit I of the 1,200 MW (2x600 MW) Mahan power plant, located in Singrauli district in Madhya Pradesh, as the company has secured 3 lakh tonnes of coal through a government-conducted special forward e-auction.
The Rs 10,000 crore plant, which requires an estimated 5.5 MTPA of domestic coal per year, had to close down as the SC cancelled the Mahan coal blocks allotted to the company.
Essar Power MP won a captive coal mine in Tokisud in Jharkhand in the recent coal auction.
The decline in coal prices and captive mines will enable Essar Power to fulfil its commitment to supply affordable power to the nation, said a company statement, adding that the company had long-term power purchase agreements and was in the process of securing more such commitments.
Sushil Maroo, executive vice-chairman, Essar Power, said: “We are thankful to the government for making coal available through e-auctions and aligning coal prices to the current market scenario. It has increased the production and supply of coal, which is a welcome move for the power sector and will help other stranded power projects.”
The development is significant and positive against the backdrop of the stress the power generating sector is going through over the past few years. Among the key concerns for the sector has been the lack of committed and affordable fuel supply.
KVB Reddy, CEO-Essar Power Ltd, CEO of Essar Power MP Limited, said: “We are optimistic that with the availability of coal, the Mahan plant will now run optimally on a sustained basis. We are also confident of commissioning Unit II by September this year.’’
Mahan’s Unit I began commercial operations in April 2013 but had to suspend operations because of non-availability of coal. The Mahan plant was linked to the Mahan Coal Block, and the company had applied for tapering coal linkage in May 2011—an issue that was taken up in the SLC meeting in August 2014. However, after the deallocation of the Mahan Coal Block and subsequent allocation of Tokisud North under the auction route, the company has now requested for grant of tapering linkage from the nearest colliery, Northern Coalfields Ltd, the company statement added.