OPGC offers to sell more power to Odisha on weak demand

The state-owned power firm is investing Rs 11,547 crore on expansion

Finding it tough to secure power offtake outside of Odisha, the Odisha Power Generation Corporation Ltd (OPGC) has offered to sell power to the state grid from the second super critical unit of 660 Mw.

Under its ongoing expansion, OPGC is adding two 660 Mw units to its existing power station of 420 Mw capacity at Ib-valley near Jharsuguda. The first 660 Mw is already dedicated to the state grid with OPGC tying up a power purchase agreement with state owned power trading firm Gridco Ltd.

“Due to a weak power market, OPGC is struggling to find buyers outside Odisha. It has requested the state government to buy the excess power coming up as part of its expansion”, said a senior state government official.

OPGC is investing Rs 11,547 crore on expansion, which also includes cost of other components like coal block development and dedicated rail corridor.

The state owned generator has already started construction work on its expansion. To fund the expansion, OPGC has already tied up funding of Rs 8,660 crore from Power Finance Corporation (PFC) and Rural Electrification (REC), by executing a loan agreement with the two Central PSUs. The balance funding is to be borne proportionately by the Odisha government and AES.

Around 80% of the work on OPGC expansion is complete. Power generation from the expanded units is expected to take off within a year.

OPGC is a 51:49 joint venture company between the Odisha government and US-based energy major AES Ltd. Though OPGC has been awarded the Manoharpur and Manoharpur dip side coal blocks, it has applied for bridge linkage since power generation from the expanded units was expected to commence earlier than coal mining. Coal production from the two mines is set to begin in April 2019 and reach peak capacity by 2021. Till then, OPGC needed the bridge linkage.

The captive coal blocks have been awarded to Odisha Coal & Power Ltd (OCPL), a 51:49 joint venture (JV) between two state run entities — Odisha Power Generation Corporation (OPGC) and Odisha Hydro Power Corporation (OHPC). Both the coal blocks have combined coal deposits of 531 million tonne (mt). OCPL proposes to invest Rs 1,500 crore on developing the blocks whose annual mining capacity is pegged at eight mt.