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Kerala - Thiruvananthapuram Printer Friendly Page   Send this Article to a Friend

State to receive low-cost power

Special Correspondent

From eastern grid; KSEB to benefit by Centre's gesture KSEB to benefit by Centre's gesture


  • New offer in addition to 90 MW being received since February
  • Gesture as part of negotiations on renewing PPA with NTPC
  • Power to cost only between Rs. 2 and Rs. 2.50 a unit

    THIRUVANANTHAPURAM: Kerala would soon start getting 90 MW more of low-cost power from the eastern grid as an incentive for supporting the exorbitantly costly naphtha-based thermal station of the National Thermal Power Corporation (NTPC) at Kayamkulam.

    Electricity Minister Aryadan Mohammed told The Hindu that the Union Ministry for Power and the NTPC had, in principle, agreed to extend this incentive to Kerala. The formal consent is expected any day, he added.

    The State had sent chairman of the Kerala State Electricity Board (KSEB) T. M. Manoharan to New Delhi on Thursday for a discussion with the NTPC and the Union Power Ministry.

    The new offer, which came at this discussion, is in addition to 90 MW of low-cost power the State had been getting from the Central pool from February this year as incentive, Mr. Mohammed said.

    The 360 MW NTPC station at Kayamkulam has been remaining idle for the last one year since naphtha had become very expensive.

    At the prevailing naphtha prices, power generated at Kayamkulam will cost more than Rs. 7 a unit. The power from the coal-based stations in East India cost only between Rs.2 and Rs.2.50 a unit.

    The original Power Purchase Agreement (PPA) the KSEB had signed with the NTPC's Kayamkulam station in 2000 had expired in February this year.

    Hard bargain

    The KSEB had been driving a hard bargain with the NTPC over the question of renewing the PPA. It is yet to be renewed.

    Since Kayamkulam station is fully dedicated to Kerala, it was up to the KSEB to shoulder the entire financial burden of its operations as per the original PPA.

    Towards fixed cost on this station alone, the KSEB had been paying more than Rs.20 crores a month to the NTPC, irrespective of whether it bought power from there or not.

    Last year, Tamil Nadu offered to share 50 per cent of this burden and, in return, the NTPC started supplying 180 MW of low-cost power to that State from the eastern grid.

    Kerala had been pressing for the same benefit as a condition for renewing the PPA on the Kayamkulam power station. With the new offer of 90 MW, the demand has been met in full.

    The State is in a position of strength as it negotiates the issue of the new PPA with the NTPC.

    The KSEB is fairly comfortable with the present availability of electricity from various sources, including its hydel stations.

    According to its assessment, the trend in demand growth and power availability is such that it can even manage without the Kayamkulam power for quite some time to come.

    However, since work on shifting fuel from naphtha to liquefied natural gas (LNG) is going on at Kayamkulam and the power generated at this station is likely to become cheaper in the coming years.

    The LNG plan also involves capacity expansion by 1,950 MW at Kayamkulam.

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