NTPC mulls offering power from TSTPP phase II to other states as Telangana delays purchase agreement

hyderabad

The Telangana government appears to be at risk of losing 85% of the 2,400-megawatt (MW) power that will be generated in phase II of the Telangana Super Thermal Power Project (TSTPP) planned by the NTPC Ltd. because it is yet to enter into a power purchase agreement (PPA), a prerequisite for the project, with the company.

The NTPC said this recently in response to a Right to Information (RTI) petition filed by Inaganti Ravikumar. The company claimed it had addressed multiple letters to the State government asking it to enter into the agreement, but the latter failed to do so.

Mandated by law

As mandated by the Andhra Pradesh Reorganisation Act, 2014, the NTPC is required to establish a 5×800 MW thermal power project to meet needs specific to Telangana by allocating to it 85% of power generated in the project. Accordingly, the Public Sector Undertaking (PSU) has already established phase I of the TSTPP with 2×800 MW capacity, and it is already in commercial operation.

The NTPC could go ahead with the 3×800-MW phase II of the TSTPP, provided that the Telangana government enters into a PPA with it for procuring power produced in the second phase, too, as the PPA is a prerequisite for financial closures and investment clearance.

The NTPC said it addressed three letters to the State government between October 2023 and February 2024 asking it to enter into a PPA at the earliest. In a strongly worded letter on January 29, it told the government that the State had the last opportunity to enter into a PPA with it by February 10. Else, it would be forced to offer the power to other needy states. In response, the government is said to have written that it would enter into a PPA by February-end. That agreement was yet to be materialised as of March 20.

It is learnt that the standing linkage (coal) committee has approved coal linkage from Singareni to the 3×800-MW plant of the TSTPP on a long-term basis under the Shakti scheme. The second phase was estimated to cost ₹17,739 crore as per 2016-17 rates, but the revised cost is yet to be assessed.

Skyview of 5×800 MW thermal power plant of NTPC

The NTPC spent ₹11,572 crore on phase I of the TSTPP with 2×800 MW capacity

It is employing 187 persons in executive category and another 2,632 on contract basis

Phase II with 3×800 MW capacity plant is expected to provide more employment to local people

Phase II offers energy at ₹4.12 a unit (₹2.07 a unit fixed and ₹2.05 a unit in variable costs)

Final tariff to be decided by the Central Electricity Regulatory Commission

Telangana government had offered to supply water needed for the project from Yellampally Barrage on the Godavari river