Topic: Ultra Mega Power Projects : By Jaimin Shah

Q. What are the highlights of UMPP?

Ultra Mega Power Projects (UMPP) were launched to meet the growing needs of the economy, achieve power at low tariff, cater the needs of more than one states and to make swift capacity addition.

These are very large sized projects, approximately 4000 MW each involving an estimated investment of about $ 4 billion. The projects envisage to substantially reduce power shortages in the country.

These projects are being developed on a Build, Own, and Operate (BOO) basis. Power Finance Corporation (PFC) has been designated as nodal agency. PFC has to create a project specific Special Purpose Vehicle (SPV), which in turn will perform the bidding process for the project.

Following are the salient features of this initiative:

The Ultra Mega Power Projects would use Super Critical Technology with a view to achieve higher levels of fuel efficiency, which results in fuel saving and lower green-house gas emissions.

Flexibility in unit size subject to adoption of specified minimum Supercritical parameters.

Integrated power project with dedicated captive coal blocks for pithead projects.

Coastal projects to use imported coal.

Q. What is the Concept of Shell Companies (SPVs) and its Operationalisation?

The preliminary project development activities including tie up of various inputs / clearances are to be carried out by the respective SPVs. These SPVs, alongwith the various clearances, tie ups, etc. are subsequently transferred to the selected project developer.

Some of the main activities undertaken by the SPVs are:

Appointment of Consultants to undertake preparation of Project Report, preparation of Rapid Environment Impact Assessment Report and to conduct other studies as required etc.

To finalise RfQ/ RfP documents in consultation with States / bidders

To carry out RfQ/ RfP process and award of project Acquisition of land for the project as per requirement of bidding guidelines Obtaining allocation of Coal blocks for pit-head projects

Getting clearance regarding allocation of water by the State Govt. for pit-head locations

Approval for use of sea water from Maritime Board/ other Govt. Agencies for coastal locations

Obtain/initiate environment and forest, clearances etc. as per requirement of Bidding Guidelines.

Obtaining geological reports/ other related data from CMPDI for the coal blocks

Signing of Power Purchase Agreements with Procurers.

Q. What is the Status of UMPP?

Four UMPPs namely Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand have been awarded to the identified developers.

Furthermore, Request for Qualification (RfQ) for two more UMPPs one in Sarguja District of Chhattisgarh and another at Bedabahal in Sundergarh District of Orissa have already been issued. Sites in respect of Tamil Nadu UMPP and Andhra Pradesh Second UMPP have been identified. Efforts are being made to bring them to bidding stage at the earliest. Sites selection processes are on for setting up of more UMPPs in different states like Jharkhand, Orissa, Tamil Nadu and Gujarat etc.