NTPC Ltd, formerly National Thermal Power Corporation, is understood to have turned down a State government proposal to take over its Rajiv Gandhi Combined Cycle Power Plant at Kayamkulam, but has offered to set up solar units and provide power at a cap rate of ₹3 per unit to Kerala State Electricity Board Ltd.
The Kerala State Electricity Regulatory Commission had in an order on April 27, 2017 proposed the takeover by paying its depreciated value. The KSEB is now paying an annual fixed cost of ₹200 crore to the NTPC without evacuating power from the Kayamkulam plant in honour of a power purchase agreement made among them.
Board sources told The Hindu that Power Minister M.M. Mani had discussions with Union Minister of State for Power Piyush Goyal and a broad understanding was made on the takeover. But the NTPC was unwilling to hand over the plant to the board.
As per the proposal, the board should pay the depreciated value, estimated at ₹800 crore. Finance Minister T.M. Thomas Isaac had offered to provide the funds for the takeover from the Kerala Infrastructure Investment Fund Board. The State government had acquired 999 acres of land for the plant at Kayamkulam and it was provided free of cost.
Of late, the State has set a model in this regard by taking over the Palakkad unit of Instrumentation Limited and expressed its resolution to join the bid for Hindustan Newsprint Limited, billed for disinvestment by the Centre citing loss.
The board sources are doubtful about the viability of the NTPC offer to supply solar power. On connecting solar power to the grid, momentary power variations are bound to occur and this may lead to grid instability and voltage fluctuations.
On approving the takeover proposal, the financially stressed board would be able to save the annual fixed cost that it is bound to pay till 2025. This also points to the need for having more hydroelectric projects that have operational flexibility and more viablity compared to other options. But the growing resistance has forced the State government to shelve such projects, at least for the time being.