Companies & Sectors
Tamil Nadu: Neyveli power plant replacement and expansion on the cards

Power shortage continue on one hand and oil prices are rising on the other. Although the Kudankulam nuclear power plant would help increase power supply to southern states, this also gives an opportunity for Tamil Nadu to expand  the 4 x 500 MW lignite based plant

The oldest power plant in Neyveli, set up 50 years ago, using locally mined lignite as fuel, and having done great service, will now be phased out. This 600 MW unit is proposed to be replaced by a new plant, which will have 2 units of 500 MW capacity each.


Estimated to cost Rs4,751 crore, this will be setup in the next three to four years. According to Surinder Mohan, Chairman and Managing Director of Neyveli Lignite Corp Ltd, orders have been already placed with Bharat Heavy Electricals Ltd (BHEL), at a cost of around Rs3,592 crore for boiler and turbine generators (BTG).


If everything goes according to plan, this Neyveli New Thermal Power Project (NNTPP) with two 500 MW units will start supplying to the grid by 2019, if not earlier. Efforts should be made by BHEL to handle the boiler and Turbine generators (BTG) contract expeditiously so that there are no delays in execution.


In the past, Tamil Nadu has always experienced power outages and power shut downs are common. Continuous power supply has become essential for the development of the State.


It may be of interest to note, that in the recent past, two 4000 MW UMPP (Ultra Mega Power Projects) in Cheyyur (Tamil Nadu) and in Odisha have been discussed at great length and in fact, these have reached the bidding stage recently. The Association of Power Producers (APP) has drawn the attention of Power Minister, Piyush Goyal, to review the current bidding model. The APP has said that the design, build, finance, operate and transfer (DBFOT) is "unviable".


It appears that even the Central Electricity Regulatory Commission (CERC) supports the view of the APP and has recommended that the build, own and operate (BOO) model would be more realistic and practical.


So, until this issue is sorted out, both Odisha and Tamil Nadu's 4000 MW UMPPs may get delayed even before the bidding starts! This only means that in order to secure its supplies and its growing industrial needs, the Neyveli replacement project (NNTPS) mentioned above, needs top priority in execution.


Out of the 600 MW generated by the old Thermal Station (TS-1), 475 MW was allotted to Tamil Nadu, and the balance to neighbouring states. So, when the new project comes onstream, four to five years from now, whether Tamil Nadu gets 950MW remains to be seen.


Luckily for Tamil Nadu, as on 7th June, the Kudankulam (KKNPP) reactor reached its full power generation capacity of 1000 MWe, thus becoming India's 21st nuclear reactor. It also became India's single largest power generating unit. Out of the 1000 MWe, Tamil Nadu's share will be 462 MWe, while other states like Karnataka (221 MWe), Kerala (133 MWe) and Puducherry (34 MWe) will share 388 MWe. 150 MWe of balance power remains un-allotted, presumably as a standby. The Nuclear Power Corp of India Limited (NPCIL) has not finalized the unit price of power produced at Kudankulam, but in the interim period, the State Electricity utilities are getting supplies at Rs1.22 per unit.


The important issue on hand, for the Tamil Nadu government and the Power Ministry to consider while taking the power needs into account, would be to seriously view this replacement plant as an opportunity to expand to 4 x 500 MW as lignite is locally available and work on hand can be completed simultaneously. Neyveli Lignite Corp must consider external assistance, if required, from international miners from Europe.


Greater power production would be able to resolve a number of problems in the southern states which are suffering from a lack of adequate supplies.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)  



Nem Chandra Singhal

3 years ago

It is nice to hear that the old and inefficient plants are being replaced by new and modern one. Thanks.

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Aggressive tactic on the fracking front

A Pennsylvania gas company offers residents cash to buy protection from any claims of harm

For the last eight years, Pennsylvania has been riding the natural gas boom, with companies drilling and fracking thousands of wells across the state. And in a little corner of Washington County, some 20 miles outside of Pittsburgh, EQT Corporation has been busy – drilling close to a dozen new wells on one site.

It didn't take long for the residents of Finleyville who lived near the fracking operations to complain – about the noise and air quality, and what they regarded as threats to their health and quality of life. Initially, EQT, one of the largest producers of natural gas in Pennsylvania, tried to allay concerns with promises of noise studies and offers of vouchers so residents could stay in hotels to avoid the noise and fumes.

But then, in what experts say was a rare tactic, the company got more aggressive: it offered all of the households along Cardox Road $50,000 in cash if they would agree to release the company from any legal liability, for current operations as well as those to be carried out in the future. It covered potential health problems and property damage, and gave the company blanket protection from any kind of claim over noise, dust, light, smoke, odors, fumes, soot, air pollution or vibrations.

The agreement also defined the company's operations as not only including drilling activity but the construction of pipelines, power lines, roads, tanks, ponds, pits, compressor stations, houses and buildings.

"The release is so incredibly broad and such a laundry list," said Doug Clark, a gas lease attorney in Pennsylvania who mainly represents landowners. "You're releasing for everything including activity that hasn't even occurred yet. It's crazy."

Linda Robertson, a spokeswoman for EQT, said in a statement that the company had worked hard and conscientiously to address the concerns of the residents. She said consultants had been hired, data collected on noise and health matters, and that independent analysis had shown the company was in compliance with noise and air quality requirements. She would not comment in detail on the financial offers.

"When landowner and leaseholder concerns arise, it is a standard practice for EQT personnel to work diligently to listen to and understand their concerns, particularly those related to the temporary inconveniences of living near a production site," Robertson said. "Regarding the neighbours on Cardox Road, the majority of whom are leaseholders, we have been in regular and ongoing communications with residents and local officials to address and resolve questions as they arise."

Hydraulic fracturing – or fracking – has provoked a litany of health and environmental concerns since it gained popularity within the last decade. Many environmentalists and public health experts contend that the practice can pollute groundwater aquifers, drastically reduce air quality and endanger the health of residents living near wells.

Over the years, the industry has vehemently denied that its work is a threat, and has often pointed to a lack of conclusive proof that gas drilling operations are to blame for any harmful health or safety issues. The industry has undertaken an array of efforts to quell these worries and preserve its business — lobbying state legislators, conducting its own scientific studies and occasionally settling quietly out of court with landowners who have threatened to sue.

The liability agreements EQT has used in Finleyville — they are often known as nuisance easements — have been used in other circumstances. Residents living close to airports, for instance, are often offered such easements as compensation for having to bear with the noise, vibrations and fumes from air traffic. Property owners close to landfills and wind farms may also sign similar agreements.

But experts say such easements are rare in the oil and gas industry.

"This is only the second time I've seen one," said Clark, the Pennsylvania attorney. "They're absolutely not common at all."

Clark says it is unlikely that companies will start handing out such agreements en masse, saying doing so could decrease landowners' confidence about the safety of the company's operations and their personal health.

"People are going to say the gas companies must be concerned about air pollution because they're offering these easements," said Clark. "Everybody's going to get suspicious."

Earlier this year, a couple in Texas was awarded $3 million in a lawsuit against a gas drilling company. The couple alleged that the company's operations had affected their health, decreased their property value and forced them to move away. The case was one of the first successful lawsuits alleging that air pollution from gas drilling activity caused health issues.

Experts say that verdict and others like it have emboldened landowners to take their claims to court. Nuisance easements may be one way to ensure that the company can easily block landowners from claiming damages.

Apart from drilling and fracking wells, EQT also builds and operates the infrastructure — pipelines and compressor stations — necessary to move natural gas to market. Its operations are headquartered in Pennsylvania but it also owns wells in Kentucky and West Virginia.

In 2008, landowners in Finleyville signed a gas lease for drilling with Chesapeake Energy. The company only drilled one well, but last year it sold its leases to EQT, which has since drilled 11 additional wells.

So far the company's strategy to reduce its liabilities has worked with some landowners.

Muriel Spencer, whose house is about 500 feet from the drilling, took the money. She said she did not consult with a lawyer, but had asked the company to put a five-year time frame around the release. The initial contract released the company from liabilities indefinitely.

"I cannot complain about the drilling to this point," Spencer said, adding that EQT "has been nothing but fair with me."

The company's spokeswoman would not comment on how many landowners EQT approached with the proposed agreements, but said that "approximately 85% of the residents" had signed them.

An initial version of the proposed standard agreement listed 30 Finleyville residents and required that they all sign the agreements in order to receive the $50,000. When the residents refused, EQT modified the agreement such that the compensation was not contingent on all landowners signing it.

ProPublica found that at least four of the 30 residents have agreed to some version of the initial agreement that EQT proposed and have received $50,000 in exchange. It is unclear what changes were made to the agreement during negotiations.

Robertson, the company spokeswoman, said in her statement that "any changes made to the agreements during negotiations were based on requests directly from the resident, and/or their attorney."

But some of the residents have refused to negotiate with the company.

"I was insulted," said Gary Baumgardner, who was approached by EQT with the offer in January. "We're being pushed out of our home and they want to insult us with this offer."

Baumgardner says his house is like an amphitheater, constantly vibrating from the drilling.

At times the noise gets up to 75 decibels, equivalent to a running vacuum cleaner, he said. Earlier this year, EQT Corp. put up a sound barrier to limit the noise, but Baumgardner says it has made little difference to his quality of life.

"We took the pictures down in the bedroom because they still vibrate at night," he said.

Baumgardner says he has had to leave his house at least three times so far because the gas fumes from the well site were too much to bear. A local health group has installed air quality monitors in his home and several of his neighbors. Last year when the one of the monitors began flashing red, his daughter, pregnant at the time, fled the house. She has since moved away after her doctor advised her not to live close to a drilling site.

"Our house is most often not livable," said Baumgardner. EQT's response to his complaints, he said, has been "constant dismissals, excuses, delays and broken promises."

Robertson would not respond to Baumgardner's specific assertions. She did point to several mitigation efforts she said the company had taken, including the sound wall, but also involving switching to quieter machinery and applying for permits to transport water via pipes instead of trucks.

Baumgardner believes the nuisance easement he was offered is a part of the industry's tactic to silence landowners.

"Throughout the last several months, an EQT regional land manager, one of our community advisers, and our community relations manager have all been engaged in phone calls and personal meetings with residents, attended township meetings, and visited the production site on multiple occasions to identify and confirm the reported issues, if any," Robertson's statement said.

"The easements are part of our overall consistent and ongoing effort to address leaseholder concerns."



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