September 08, 2008

Kerala plans INR 4,000 crore coal based power project

It is reported that Kerala State Electricity Board is exploring the viability of setting up an INR 4,000 crore coal based power project at Cheemeni, between Payyannur and Kasargod. Since the coal based project, which is estimated to generate 1,000 MW, is likely to face strong opposition from environmentalists and the pollution control agencies, political clearance is a must for the project.

The MoU to mine the 602 million tonnes of coal from Bairany in Orissa jointly by Orissa, Gujarat and Kerala was signed the other day. Originally, the plan was to set up the plant in Orissa itself. There are different options before the KSEB on utilizing the coal to be mined from Bairany. It can even sell the coal to another player and buy power from it without committing any capital investment on its part for the plant. The centre gave permission for mining only to generate power. The mining facility itself would cost over INR 1,000 crore.

It has been calculated that drawing power from Orissa plant would be cheaper compared to generating power from Cheemeni plant after bringing coal through the Mangalore port or the proposed Ezhimala port. But, if the employment potential and its contribution to the overall economy of the state are taken into consideration, it would be a political gain for the state government.