Lack of PPA holds up NTPC’s 2,400 MW power project in Telangana

Construction of Stage-II of the Telangana Super Thermal Power Project has been delayed despite all approvals, as the State government has not entered into a mandatory power purchase agreement with NTPC, stalling the 2,400 MW expansion

Peddapalli: Construction of Stage-II of the Telangana Super Thermal Power Project has not begun despite receiving all required approvals.

The National Thermal Power Corporation, which is executing the 4,000 MW project, is yet to start work due to the absence of a power purchase agreement with the State government.

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As 85 per cent of the power generated is meant for Telangana, a formal power purchase agreement between the State and NTPC is mandatory before construction can commence.

However, the State government has not shown interest in entering into the agreement, delaying the project.

The 4,000 MW thermal power project was sanctioned to Telangana under the Andhra Pradesh Reorganisation Act, with NTPC entrusted with its execution.

Stage-I of the project, comprising 1,600 MW through two 800 MW units, has already been completed and power generation has begun.

For Stage-II, NTPC plans to develop the remaining 2,400 MW through three 800 MW units. Bharat  Heavy Electricals Limited has been awarded the construction contract. The project received environmental clearance two months ago. The NTPC board has also approved the project cost of Rs 29,485 crore.

Despite all clearances being in place, the lack of a power purchase agreement continues to stall the start of construction.

Eight months ago, the Union Ministry of Power wrote to the State government seeking a written response on the agreement, but no reply has been received so far.

While the reasons remain unclear, reports suggest the State government is unwilling to sign the agreement.

Earlier, there were reports that the State might agree to a power purchase agreement for only 800 MW instead of the full 2,400 MW under Stage-II. However, no agreement was finalised.