Lok Sabha Question No. 578 (UNSTARRED), answered on 2021-07-22
Subject: Protection of Thermal Power Plants
Ministry: POWER
Asked by: Raghu Ramakrishna Raju Kanumuru

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.578 TO BE ANSWERED ON 22.07.2021

## PROTECTION OF THERMAL POWER PLANTS

578.   SHRI KANUMURU RAGHU RAMA KRISHNA RAJU:

Will the Minister of POWER be pleased to state:

- (a) whether the Government has taken a decision to protect the thermal power plants in the country and embarking on bringing out a turn-around policy for the said purpose;
- (b) if so, the details thereof; and
- (c) the steps being taken by the Government for survival of the power projects and other power using industries to withstand and compete in the international markets?

## A N S W E R

## THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI  R.K. SINGH)

(a) & (b) :  Generation is a delicensed activity and as per Section 7 of the Electricity Act, 2003, 'any generating company may establish, operate and maintain a generating station without obtaining a license/permission under this Act, if it complies with the technical standards relating to connectivity with the grid. Accordingly, sanction of the Government is not required for setting up of thermal power projects.'

The Department of Financial Services (DFS) sent a list of stressed projects in  the  power  sector  on  22.03.17  to  Ministry  of  Power  (MoP).  The  34  non-captive  coal based  power  projects  mentioned  in  the  DFS  list  are  mostly  private  and  have  a  total installed capacity of 40,130 MW. Thereafter, a High Level Empowered Committee (HLEC) was  constituted  by  the  Govt.  on  29.07.18  to  address  the  issues  of  Stressed  Thermal Power Projects, which identified the following major reasons for stress in power sector, in its report dated 12.11.18:

- i) Issues related to Coal supply
2. ii) Slow growth in Power demand
3. iii) Delayed payments by Discoms
4. iv) Inability of the Promoter to infuse the equity and service debt
- v) Slow implementation of project by the developers
6. vi) Issues related to Banks/ FIs
7. vii) Aggressive tariffs quoted by bidders in competitive bidding process
8. viii) Regulatory and contractual disputes
9. ix) Legal issues related to auctioned coal mines
- x) Other Operational Issues

The recommendations of the HLEC were examined by a Group of Ministers (GoM),  which  in  turn  made  recommendations  regarding  stressed  power  projects.  On 07.03.2019, the Government approved the recommendations of Group of Ministers (GoM). The

MoP  vide OM  dated 08.03.2019, notified the approval of the Government. recommendations of GoM approved by the Government have been implemented.

Status of 34 thermal power projects of capacity 40,130 MW which are under stress as reported by DFS is as follows:

- (i) 16 projects with a total capacity of 19,090 MW have been resolved.
- (ii) 10 projects with a total capacity of 12,430 MW are at various stages of resolution.
- (iii) 8  projects  with  a  total  capacity  of  8,610  MW  are  at  very  initial  stage  of construction and are totally stalled. Such projects have either been ordered to be liquidated or heading towards liquidation.
- (c) : Steps taken to resolve the stress in thermal power sector are as follows:
- (i) After  the  cancellation  of  204  coal  blocks,  Govt.  of  India,  Ministry  of  Coal formulated a transparent policy for reallocation of cancelled coal mines in a fair and transparent method. Government has re-allocated 64 blocks through auction/allotment till date.
- (ii) Introduction of Transparent Linkage policy: On 22.05.2017, Government introduced SHAKTI Policy for grant of linkage to power sector. Linkages granted under SHAKTI Policy are:
- a. Shakti Policy Para B(i) (Coal linkage to Central and State Gencos): Linkage granted to 23 nos. Thermal Power Projects (TPPs) totaling 25,340 MW under Central/State Sector category.
- b. Shakti  Policy  Para  B(ii)  So  far  three  rounds  of  B(ii)  auction  have  been conducted and Linkage of 39.481 MTPA (G13 grade equivalent), has been awarded.
- c. Shakti  Policy  Para  B(iii)  (Coal  Linkage  to  IPPs  not  having  any  PPA):  One round of such auction has been held in which around 7.15 MTs of coal (G13 grade equivalent) have been awarded by CIL to 7 Thermal Power Projects having an installed capacity of 5995 MW.
- d. Shakti Policy Para B (viii) (a) (Short term coal linkage 3 months to one year to sell power in Day Ahead Market (DAM) or DEEP portal) Quarterly auctions are held  and  so  far  6  auctions  were  held  and  a  total  quantity  of  5.39  MT (G13 grade equivalent) of coal has been awarded.
- (iii) Pilot project for procurement of 2500 MW power: In order to address the problem of  lack  of  Power  Purchase  Agreements  (PPAs)  in  the  country,  the  Ministry  of Power had notified a scheme for procurement of 2500 MW on competitive basis for a period of 3 years from the generators with commissioned projects having untied capacity.
- (iv)
- (v)
- (vi) the variability and uncertainty associated with the RE sources.
- a. 1 st   Round  (2500  MW):  The  tariff  discovered  was  Rs.  4.24/kWh.  Letter  of Award (LOA) was issued to 7 successful bidders (1900 MW) - PPA signed.
- b. 2 nd  Round (2500 MW): Bids opened on 07.02.2020. The tariff discovered was Rs. 3.26/kWh. There are 12 successful bidders identified.

Payment Security Mechanism: MoP issued an order on 28.06.2019 and subsequent corrigendum thereon dated 17.07.2019. The National Load Dispatch Centre (NLDC) & Regional Load Dispatch Centre (RLDC) have been directed to despatch power only after it is intimated by the Generating Company and /Distribution Companies that a Letter of Credit (LC) for the desired quantum of power  has been opened. This has ensured timely payments by Discoms to the generators. Payment relief to Discoms under Aatma Nirbhar Bharat Abhiyan: To alleviate the liquidity problems of DISCOMs, Government of India decided to grant a one-time permission to  PFC  and  REC  for  extending  loans to  DISCOMs  above  the  working capital  limits  of  25%  of  last  year's  revenues  under  UDAY  to  discharge  their liabilities as existed on 30.06.2020 in favour of CPSE Gencos and Transcos, IPPs, and RE generators. Government of India has taken various initiative towards sustainable development and cleaner environment which includes large capacity addition from Renewable Energy  (RE)  Sources.  However,  large-scale  integration  of  Renewable  Energy sources would require balancing by the conventional power generators to manage

***********