Sasan plant may shut down in March for lack of coal: Reliance Power tells Delhi HC

The threat of a shutdown is looming large over the operation of Reliance Power's 3,960 megawatt power project in Madhya Pradesh if it is not allowed to mine coal in excess of the cap set by the Centre, the company told Delhi High Court today.

Sasan Power Ltd, a subsidiary of Reliance, moved an application before a bench of Acting Chief Justice Gita Mittal and Justice C Hari Shankar, contending that the cap of 17 million tonne per annum (MTPA) on mining from its two coal blocks Moher and Moher-Amlohri blocks was not enough to carry out operations till the end of this financial year.

It said the approved quantity of coal would not meet the requirement for running the plant for the last 10 days of March this year, severely affecting 42 crore consumers.

The company has contended that if it was not allowed to mine another 2 MTPA, that is up to 19 MTPA, in this financial year, it will not be able to meet the requirements of its Sasan Ultra Mega Power Project (UMPP) that supplies electricity to 14 discoms in seven states.

Such a situation will also entail a loss of around Rs 130 crore for the company, while the discoms would have to shell out more than Rs 200 crore to purchase power from other sellers to provide electricity to their 42 crore consumers, it claimed.

The company said in its plea that it supplied electricity under a 25-year long term power purchase agreement on a tariff of Rs 1.196 per kWh to 14 discoms across the states of Delhi, Haryana, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

In its application seeking permission to mine 19 MTPA, Sasan has contended that this will also help it to maintain additional stock of coal of 1.25 million tonne for meeting any exigency which might disrupt coal production.

It has also claimed that it has exhausted most of its accumulated stock last year to run its plant when it had to stop mining after hitting the 17 MTPA cap.

The application was submitted in the main writ petition filed by Reliance Power and Sasan challenging the Centre's May 7, 2015, decision to cancel one of the three coal blocks allocated to Sasan UMPP.

The government had justified the cancellation saying the unit's coal requirement could be met by the other two mines, Moher and Moher-Amlohri extension in Madhya Pradesh.

Sasan project is an integrated power plant-cum-coal mining project at a single location, involving an investment of over Rs 27,000 crore, Reliance has said in its petition.