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 21^st 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.)