Jharkhand and Telangana will buy all the power produced from NTPC's proposed 4,000 MW plants in the two states, according to sources familiar with the development.
While this is not the first time a state will buy all the power produced by the central utility, normally, a state gets 15 percent of power allocated to it while it can buy more under a power purchase agreement. The projects were not envisaged by NTPC but arose out of the emerging situation.
While the central government has complete hold over the allocation of power from a project belonging to any of its companies, the energy is normally distributed in 10:15:75 ratio.
The host state gets 15 percent of power produced from the plant, 10 percent goes to the central pool while 75 percent is expected to be signed under long-term power purchase agreements between the utility and a state government. The host can always and does get more than its allocation, signing it under a PPA.
The central generation utility is setting up the first project under a 74:26 joint venture with the state’s power producer while it fully owns the project in the southern state.
Both the projects are being set up in two phases. The Jharkhand project will come at Patratu in the state’s Ramgarh district while the Telangana plant will come up at Ramagundam in the state’s Peddapalli district. Ramagundam already has a running 2,600 MW plant belonging to NTPC and the new units would come up at the same site.
The first phase of Patratu project will comprise three units and the second one two units while the Ramagundam project’s two phases will comprise two and three units, respectively. Each unit at either of the plants will be of 800 MW.
Each of the 4,000 MW plant will cost approximately Rs. 30,000 crores as per current estimates, the cost of setting up each unit coming at Rs. 7.5 per unit.
Patratu earlier hosted more-than-a-25-year-old 840 MW plant comprising six units of 50-100 MW and four units of 110 MW each. Various units of the plant stopped functioning at different intervals over the years and it was finally shut down a couple of years back as the machines were outdated and polluting. The new units would be erected at this site.
The Andhra Pradesh Reorganization Act 2014 mandated that NTPC would establish a 4,000 MW power plant for the newly carved out state of Telangana. There are many instances of a state government tying up all the power of a particular plant, some examples being NTPC's plants at Singrauli and Tanda in Uttar Pradesh.
