Lack of coal forces Lanco to shut Udupi power plant

Lack of coal forces Lanco to shut Udupi power plant

Lanco Infratech's 1,200 MW Udupi electricity plant in Karnataka has been shut down due to non- availability of coal, while the state government put the blame on the company and said it would manage the power situation.

While a company spokesperson declined to comment on the matter, sources said the project, fired by imported coal and an important source of electricity for the state, has been facing financial difficulties due to outstanding payments for power supplied to Karnataka.

When contacted, Karnataka Energy Minister D K Shivakumar told PTI that all bills have been paid to the firm and that the state had even given Rs 300 crore in advance.

"They are trying to blackmail us... No individual power producer can blackmail the Karnataka government... We are an investor friendly government," the Minister said.

"We will manage the (power) situation and have the alternative... and (this time) we are having good rain," he said.

Meanwhile, sources said with dues yet to be paid, it has become difficult for the plant operator to purchase overseas coal.

The operator has already communicated to Karnataka entities that it was going to shut down the two units (600 MW each) citing non-availability of coal.

For the Udupi project, long-term power purchase agreements (PPA)are in place with five ESCOMS (Electricity Supply Companies) of Karnataka for supply of 90 per cent of power generated.

Besides, there is a PPA with Punjab State Power Corporation for supply of 10 per cent, according to Lanco website.

Coal for the plant is mainly imported from Indonesia.

At the end of April this year, Karnataka had installed thermal power generation capacity of nearly 6,200 MW with private sector accounting for 2,060 MW, according to data from the Central Electricity Authority (CEA).

As per the data, Karnataka witnessed a power deficit of 5.9 per cent (in terms of million units) during April. 

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