Odisha demands grants for Pump Storage Projects from NCEF

Bhubaneswar: Noting that coal bearing states face the adverse effect of mining, reduction in forest area, risks of environmental pollution and strain on water resources, Odisha Chief Minister Naveen Patnaik today asked the Centre to provide financial assistance for Pump Storage Projects (PSP) from the National Clean Energy Fund.

“It is requested that financial assistance (grant) to the tune of 75 per cent, the estimated coast of each PSP, may be provided from the NCEF to bring down the cost of power from these projects in order to make the tariff affordable,” Patnaik said in his letter to Prime Minister Narendra Modi.

Patnaik further said “Once the institutional mechanism is established and in-principle clearance is accorded by the government of India, specific proposals will be submitted by the state government for execution of renewable energy projects including hydro-electric projects, more particularly, the PSPs.”

The CM said that whereas the coal bearing states have to bear the brunt of negative externalities on account of setting up of the pit-headed thermal plants to cater to the power requirement of the country, some other states have the locational advantage of harnessing the renewable energy.

“It is therefore, imperative that the coal bearing states should be assigned reasonably lower limits for Renewable Power Obligation (RPO). Besides, the renewable energy projects in the coal bearing states should be funded from the NCEF.

“Further, hydro-electric projects having installed capacity of more than 25 MW, especially the Pump Storage Projects, may also be considered as renewable energy projects.

These projects would help tremendously in meeting the peak demand and also in balancing the Grid,” Patnaik said in the letter.

Meanwhile, Patnaik said the state government has conducted pre-feasibility studies of three PSPs. They were: Upper Indravati with capacity of 600 MW, Balimela (400 MW) and Upper Kolab (320 MW).

Together, these three projects’ capacity would be 1320 MW which required investment of Rs 3950 crore. “The state sought an assistance of Rs Rs 963 crore for the three projects from the NREF.

Of the three projects, detailed project report in respect of 600 MW PSP scheme of Upper Indravati Hydro-electric project is under preparation by M/s WAPCOS Limited, Patnaik mentioned in the letter.

Stating that the rate of royalty on coal has not been revised for more than four years, Patnaik pointed out that the Central government has enhanced the “Clean Environment Cess” on coal from Rs 200 per MT to Rs 400 per MT in the Union Budget 2016-17.

“This is likely to result in collection of about Rs 6,400 crore from about 160 million tonnes of coal to be produced during this fiscal,” he said.

It is learnt that the proceed from the clean environment cess on coal are deposited in the National Clean Energy Fund, which is earmarked for development of renewable energy in the country, Patnaik said adding as the cess is collected from the coal bearing states, these states have legitimate expectation of getting a share from the funds collected on this account.

“In this context that I had requested for sharing of at least 60 per cent of the proceeds of the cess on coal with the coal bearing states through an appropriate mechanism,” Patnaik said in the letter.

He said Odisha being a major coal bearing state has to face different impact of coal mining activities.