Cheyyur UMPP will make electricity unaffordable in TN, says report

Even as Tamil Nadu contends with rising electricity rates, the Cheyyur UMPP will place an upward pressure on electricity tariffs in the state, says a research report prepared by US-based IEEFA
The 4,000MW ultra mega power project (UMPP) worth Rs24,200 crore at Cheyyur in Tamil Nadu is financially not viable and would only make electricity unaffordable in the state, says a report.
The report prepared by US-based Institute of Energy Economics and Financial Analysis (IEEFA) for Chennai-based Indian Institute of Public Policy (IIPP), says, “…the tariff for consumers would be Rs4.9 per kWh (unit) in 2021, its first year of operation, and an average tariff of Rs5.95 per unit over its 40 year life. Every year of delay will push up costs further. These rates are up to five times higher than tariff costs at other UMPPs and coal-fired power plants.”

Cheyyur plant not viable

Experts say price of electricity from the 4,000-MW project will be fivetimes higher than the tariff at other ultra mega power plants

The proposed 4,000-MW ultra mega power project at Cheyyur is financially not viable and would put an upward pressure on electricity tariff. This would also make electricity unaffordable for consumers, says a report.

The report prepared by US-based Institute for Energy Economics and Financial Analysis (IEEFA) for Chennai-based Indian Institute of Public Policy explains that in the first year of its operations, which is 2021, the tariff for consumers would be Rs. 4.9 per unit. On an average, tariff would be Rs. 5.95 per unit over its 40 year life.

“This pricing is five times higher when compared to the tariff at the other ultra mega power plants (UMPPs) and coal-fired power plants,” says Jai Sharda, Managing Partner, Equitorials, a financial analysis firm that studied the economic viability of the Cheyyur plant.

Read full story here: http://www.thehindu.com/news/national/tamil-nadu/cheyyur-plant-not-viable/article7229273.ece

US Report Claims Proposed Cheyyur Power Project is Not Financially Viable

CHENNAI: The proposed 4,000 MW coal-fired power plant in Cheyyur taluk of Kancheepuram district will either be a loss-making proposition or consumers will have to pay higher tariffs, a US-based Institute for Energy Economics and Financial Analysis (IEEFA) said in a report commissioned by the Chennai based think-tank Indian Institute of Public Policy.

The IEEFA report, based on publicly available documentation on the plant, states that the tariff of power generated would be Rs 4.9/unit in the first year of operation (2021) and would level off to Rs 5.95/unit over the plant’s lifetime reaching Rs 8.3/unit in 2036.

“It does not include cost overruns as a result of delays in land acquisition or on-the-ground resistance or increase in international coal prices,” said Jai Sharda, the copartner of Ahmedabad based Equitorials, an Indian financial analysis company that has prepared the financial model for the report.

Read full story here: http://www.newindianexpress.com/cities/chennai/US-Report-Claims-Proposed-Cheyyur-Power-Project-is-Not-Financially-Viable/2015/05/21/article2825338.ece

Cheyyur UMPP will make electricity unaffordable in TN; UMPP Policy Flawed: Report finds

PRESS RELEASE

CHENNAI. 20 May, 2015

Even as Tamil Nadu contends with rising electricity rates, a new report finds that the 4000 MW coal-fired power plant proposed in Cheyyur is not financially viable as it will place an upward pressure on electricity tariffs in the state. The report concludes that “Ongoing and planned grid and transmission improvements, competitive wind and solar prices, the existing pipeline of power projects in Tamil Nadu and greater resource planning have diminished the need for construction of Plant Cheyyur.”

Read full press release here

Read Executive Summary in English here

Read Executive Summary in Tamil here

Read Full Report in English here

Land Acquisition Delays: Reliance Power terminates 3,960 MW Tilaiya power plant

Anil Ambani-led Reliance Power today said it has terminated the contract for Rs 36,000 crore Tilaiya ultra mega power project in Jharkhand over inordinate delays in land acquisition.

The firm had, in August 2009, won rights to set up a 3,960 MW power plant at Hazaribagh in Jharkhand after bidding a levelised tariff of Rs 1.77 per unit but couldn’t start work on the project as the state government had not provided the required land even after more than five years.

Jharkhand Integrated Power Ltd, a wholly-owned subsidiary of Reliance Power, “has terminated the Power Purchase Agreement (PPA) of its 3,960 MW Tilaiya Ultra Mega Power Project (UMPP) in district Hazaribagh, Jharkhand,” the company said in a statement.

Read full story here: http://www.dnaindia.com/money/report-land-acquisition-delays-reliance-power-terminates-3960-mw-tilaiya-power-plant-2081351

Court Bars State from Taking Possession of Land for Cheyyur Power Project

Issuing interim injunctions in two separate cases, the Madras High Court has directed Tamil Nadu state government authorities to maintain status quo on the matter of possession of land for the 4000 MW coal-fired power plant cum captive port in Cheyyur, Kanchipuram district. The latest injunction was ordered on 26 March, 2015 in a case filed by A. Kasthuri who owns a residential plot in Panaiyur vilage. The district revenue authorities are acquiring around 1000 acres of land for the project under the Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997. Acquisition proceedings are at an advanced stage, and awards for compensation have been made. However, the lands have not changed possession as many of the farmers and land-owners have refused to part with the papers or hand-over the land.

Two land-owners with plots in Panaiyur village have approached the High Court opposing the acquisition of their land for setting up a captive port for the Cheyyur power project. They have claimed that the Industrial Purposes Act which was used to acquire the land does not have any self-contained provision for calculation of compensation. The suit argues that since the Act relies on the Land Acquisition Act, 1894, for computation of compensation, and since the 1894 Act has been replaced by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, settling land acquisition or calculating compensation under the 1997 law cannot be maintained in law.

The case is pending and the court is yet to take a final view on the matter.

Centre aborts Cheyyur and Bedabahal UMPP bids to avoid Public sector

The ambitious ultra mega power project scheme has received a set back with centre cancelling the bids for the two proposed plants at Bedabahal (Odisha) and Cheyyur (Tamil Nadu) citing tepid private sector response. But, In both Cases, bids of public sector companies were rejected by the centre. The country’s largest thermal power producer, the NTPC, has emerged as the sole bidder for the Tamil Nadu project, NTPC and a NHPC-BHEL joint venture are in the fray for the Odisha UMPP.

If a public sector company is the only bidder then the project can be awarded. But if a private firm is the sole bidder, the tender can be scrapped as per bidding rules. But private companies and The Association of Power Producers (APP), a body representing the private firms, were lobying for cancellation tender and the centre accepted it.

“Unfortunately we did not get enough bids, we have had to scrap the process, its a process which was initiated before this government came in, I thought it was not prudent to keep extending the date without any possible solution,” Power and Coal Minister Piyush Goyal said.

Read full story here: http://www.kseboa.org/~kseboa/news/centre-aborts-cheyyur-and-bedabahal-umpp-bids-to-avoid-public-sector-08013623.html