Essar Power MP Ltd, the operator of the 1200 MW power plant, located in Madhya Pradesh, has secured 3 lakh tonnes of coal through a Government conducted special forward e-auction.

Essar Power MP won a captive coal mine in Tokisud in Jharkhand state in the recent coal auction. Essar has invested over Rs 10,000 crore in the 1200 MW Mahan plant which requires an estimated 5.5 MTPA of domestic coal per year and the Tokisud captive coal mine. The decline in coal prices and captive mines will enable Essar Power to fulfill its commitment to supply affordable power to the nation. The company has long-term power purchase agreements and is in the process of securing more such commitments.

Mr Sushil Maroo, Executive Vice Chairman, Essar Power, said: "We are thankful to the Government for making coal available through e-auctions and aligning coal prices to the current market scenario. It has increased the production and supply of coal, which is a welcome move for the power sector and will help other stranded power projects"

The development is significant and positive against the backdrop of the stress the power generating sector is going through over the past few years. Among the key concerns for the sector has been the lack of committed and affordable fuel supply.

Mr KVB Reddy, CEO-Essar Power Ltd, CEO of Essar Power MP Limited, said: "We are optimistic that with the availability of coal, the Mahan plant will now run optimally on a sustained basis. We are also confident of commissioning Unit II by September this year.”

Mahan’s Unit I began commercial operations in April 2013 but had to suspend operations because of non-availability of coal. The Mahan plant was linked to the Mahan Coal Block, and the company had applied for tapering coal linkage in May 2011 — an issue that was taken up in the SLC meeting in August 2014. However, after the de-allocation of the Mahan Coal Block and subsequent allocation of Tokisud North under the auction route, the company has now requested for grant of tapering linkage from the nearest colliery, Northern Coalfields Ltd.

The Government of India’s UDAY (Ujjwal DISCOM Assurance Yojana) scheme provides opportunities for private sector power companies to sign PPAs with the states that have joined the initiative. This will go a long way in meeting India’s objective of affordable round-the-clock power by 2019.