- First unit recommenced operations in May 2016 after 19-month hiatus
- Plant has secured 22 lakh tonnes of coal through e-auctions
- About 50 percent of annual coal requirement to be supplied from Tokisud block, which is expected to become operational in 2017
- Essar Power has a targetted capacity of 6,100 MW
Essar Power MP Ltd (EPMPL), a subsidiary of Essar Power Ltd, plans to commence commercial operations from its second 600 MW unit at its 2x600 MW Mahan power project in Madhya Pradesh’s Singrauli district from Q4 of FY2016-17.
Mahan’s Unit 1 began commercial operations in April 2013 but had to suspend generation because of the cancellation of the captive coal block by the Honourable Supreme Court, and the subsequent non-availability of coal. The Company restarted operations in May this year—following a gap of 19 months—after securing coal through government conducted special forward e-auctions. Until date, the Company has secured 22 lakh tonnes of coal through the auction route at a consideration of about Rs660 crore.
In the coal block auctions conducted in 2015, EPMPL won a captive mine in Tokisud in Jharkhand state. Essar has invested over Rs 13,000 crore in the 1,200 MW Mahan plant and development of Transmission network connecting Mahan plant to National Grid, which requires an estimated 5.5 million tonnes of domestic coal per year. Of this, 2.32 million tonnes is likely to be supplied every year from the Tokisud block, which has estimated reserves of 52 million tonnes, and is expected to commence operations in 2017.
EPMPL has long-term power purchase agreements with Essar Steel and the MP Government. It is trying to tie up its full capacity through additional long- and medium-term PPAs.
Mr MK Sharma, COO, EPMPL: “The availability of coal throughgovernment conducted auctions has breathed new life into our project.We are currently operating Unit 1 close to full load and are confident of starting of generation from Unit 2 in next 6 months.”
Mr KVB Reddy, CEO, Essar Power Ltd, said: “With a total investment of Rs 30,000 crore, Essar Power has a goal of attaining a generation capacity of 6,100 MW from its eight plants. The start of generation from the second unit will be an important milestone which shall enhance the business operating capacity to 4900 MW and would mean the completion of capex cycle for the Power Business apart from Tori project which shall be completed in FY 18-19. This shall also result in sustainable cash generation for the business and improve its ability to meet various creditor liabilities going forward.”