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Coal India inks pact with NLC for solar, thermal power diversification
As part of its plan to evolve into an energy company rather than just being a miner, Coal India has signed an initial agreement with NLC India for the formation of a joint venture (JV) company which will generate 3000 MW of solar and 2000 MW of thermal electricity.
In the proposed JV, both Coal India and NLC will have an equal stake and the total investment is estimated to be around Rs. 120 billion. In case this JV can generate the targeted solar energy, it will fulfill the coal ministry’s target to Coal India which dictates it to become a Net Zero Energy company in the near term.
According to the agreement, this JV company will have a timeline of 15 months to complete the solar power projects and for completion of solar power projects and a 5-year period to complete the thermal power projects which will be financed via a debt-equity ratio of 70:30 as per the Central Electricity Regulatory Commission norms. A concept paper has been initiated by both the companies to get clearance from their respective boards.
“This is a synergistic step, combining the resources of both the companies for a common goal. Coal India will be riding the core technical expertise of NLC India in thermal power generation and solar power”, a Coal India official said.
The solar power projects will be set up in some of the identified barren and reclaimed free land of Coal India.
Besides, additional land may be required to set-up the solar projects. It is estimated that this JV will be needing around 15,000 acres of land to set-up the solar generating stations.
In the past, to pursue its ambitious solar power venture, Coal India had submitted a Green Energy Commitment letter to Ministry of New and Renewable Energy for developing 1000 MW solar power projects and an agreement was also signed with Solar Energy Corporation of India (SECI) to set up part of the project in Madhya Pradesh.
“But, due to a downward trend in prices of solar projects and availability of land in Madhya Pradesh Solar Park, the tenders were cancelled”, a Coal India official said.
Previously, while talking to Business Standard, Coal India’s chairman cum managing director, A. K. Jha said that this company is targeting to evolve into an energy company from being just a mere miner and the upcoming power projects are a step into that direction.
“There are a few places where evacuation will still be a problem even with our best efforts. So we can use the pithead stock after the requisite evacuation to feed power plants which can be constructed at the pitheads itself”, Jha said earlier during an interview to this newspaper.
The JV wit NLC India will not only help Coal India meet the ministerial directive but will also help it diversify and open new avenues of revenue at a time when thermal power generation is expected to stagnate.