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Home News Power Sector News New environment norm to delay power projects

New environment norm to delay power projects

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Coal mineThe going is set to become tougher for the companies who have proposed to set up steel plants and thermal power projects. Some of the major investment proposals in Orissa the steel and power sector which are already bogged down by delay for various reasons are poised to face further delay with the Union ministry of environment and forests (MoEF) insisting on environmental and forest clearance for the coal supply sources of these projects before giving the green signal for such projects.

The MoEF in its latest circular has stated that the green signal pending for all thermal power, steel and sponge iron projects will be deferred till the status of their environment and forest clearance for coal supply sources are not furnished.

Industry leaders have stated that the latest move of the MoEF will deal a blow to the steel makers and Independent Power Producers (IPPs), some of whom are already grappling with inordinate delay in project execution. The latest directive of MoEF has come at a time when the ministry has stalled the expansion plan of Vedanta Aluminium and issued a stop work order on Posco India- both projects being big ticket investments in the state.

"Those thermal power plants who have been allocated coal blocks will be hit by this move of the MoEF and their projects will be pushed to further delay. Getting environment clearance for a coal block is long-drawn process and it is not going to be easy for the IPPs who have been allocated coal blocks. However, the going is not going to be tough for those IPPs who are getting coal linkages as the linked coal is supplied from the operational mines of Coal India Limited (CIL) which already have the environmental clearance", said Muralidhar Mishra, senior vice president (corporate relations and administration) of Ind-Barath Energy Utkal Limited (IBEUL).

IBEUL is setting up a 700 Mw (2x350) IPP at Sahajbahal near Jharsuguda. It is set to sign the Fuel Supply Agreement (FSA) with Mahanadi Coalfields Ltd (MCL), a CIL subsidiary for coal linkage.

"We have already got the environmental clearance for our steel project at Kalinga Nagar and therefore this circular of MoEF is not going to affect us. However, the move is set to delay our proposed 1320 Mw (2x660) IPP at Luni. Getting environmental clearance for a coal block is taking 3-5 years and without coal block allotment, we cannot achieve financial closure for the power project", said Rajdeep Mohanty, resident director, JSL Ltd.

"Thermal power projects who are getting coal blocks will definitely face delay because of this latest move of the MoEF. However, the power projects getting coal linkage will get a respite as the coal will be supplied from operational coal mines which already have the environmental clearance", said a top official of a leading power firm setting up an IPP in the state.

It may be noted that the Orissa government has signed MoUs (Memorandum of Understanding) with 27 IPPs. Seven of these IPPs- GMR Kamalanga Energy Ltd, Nava Bharat Power Ltd, Jindal India Thermal Power Ltd, Lanco Babandh Power Ltd, Sterlite Energy Ltd and Tata Power Company Ltd have already been allocated coal blocks.

Source- sify


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