The Hindu : Kayamkulam power to cost far less by 2008

Online edition of India's National Newspaper
Thursday, Jan 15, 2004

Kerala

Kerala

Kayamkulam power to cost far less by 2008

By P. Venugopal

THIRUVANANTHAPURAM, JAN. 14. The power being generated at the Kayamkulam station of the National Thermal Power Corporation (NTPC), currently costing more than Rs. 3.90 a unit, will be available to the State at a rate of around Rs. 2.50 a unit by 2008-09, according to the company's Director (Technical), S.L. Kapur.

The year 2008-09 is the deadline set by the NTPC to commission the first module of its 1,950 MW expansion programme at Kayamkulam. The programme envisages shifting fuel from costly naphtha to far cheaper liquefied natural gas (LNG) at this plant to substantially bring down the cost of power generation.

Mr. Kapur made this statement here today while replying to queries from the media soon after signing a memorandum of understanding (MoU) with the Kerala State Industries Development Corporation (KSIDC) for the Kayamkulam expansion programme.

The Kerala State Electricity Board (KSEB) has been finding the high cost of the Kayamkulam power extremely unaffordable. The high cost even prompted the State last year to surrender, on a temporary basis, its exclusive right over the electricity generated at this station. Tamil Nadu is currently sharing the burden, because of its own compulsions, by purchasing part of the power generated at Kayamkulam.

The proposal is to increase the generation capacity of this station from the present 350 MW to 2,300 MW. The existing 350 MW stage-one power station will continue to be fully dedicated to Kerala, while the power from the next stage (1,950 MW) will be distributed to various States as per the guidelines of the Union Government. Kerala too will be eligible for its share of the stage-two station. The State will get a total of about 820 MW of power from the Kayamkulam NTPC project when the expansion is completed. This will be enough to meet more than 20 per cent of the State's power requirement.

The total cost of the expansion programme was initially estimated at Rs. 7,584 crores. However, with the introduction of the Union Government's `Mega Power Project Policy' (under which certain concessions would be available for such projects), the project cost would come down to around Rs. 6,600 crores, Mr. Kapur said. The programme is proposed to be fully financed by the NTPC and the role of the KSIDC will be to provide the necessary promotional support and services for obtaining various exemptions, clearances, approvals and notifications, besides facilitating the supply of cooling water from the State Government.

The NTPC has already obtained initial clearances for the project and floated global tenders inviting bids for the supply of LNG and for its re-gasification. The LNG supplier would have to set up the terminal and develop a port at Kayamkulam, Mr. Kapur said. The NTPC had received responses from 16 bidders, nine for LNG supply, six for re-gasification plant and transportation and one for natural gas. "We hope to commission the first module (650 MW) of the expansion programme in 2008-09," he said.

The Managing Director of KSIDC, P. H. Kurien, who signed the MoU on behalf of the KSIDC, expressed the hope that the proposed LNG terminal would ensure the supply of cheap feedstock to other industrial units in the State as well. Replying to a question, Mr. Kapur, however, said the envisaged capacity of the LNG terminal was (only) 2.5 million tonnes. The NTPC itself would require 2 million tonnes of LNG at Kayamkulam, he said.

The Chief Minister, A.K. Antony, the Electricity Minister, Kadavoor Sivadasan, the Industries Minister, P.K. Kunhalikutty, the Minister for Information and Parliamentary Affairs, M.M. Hassan, and several senior Government officials were present when the MoU was signed.

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