Yadadri thermal plant faces coal supply crunch, cost burden

The 5×800 megawatt Yadadri Thermal Power Station (YTPS) at Dameracherla in Nalgonda district, initiated by the previous BRS government, is emerging as a significant financial burden on the State even before its construction is complete.

The plant requires 14 million tonnes of G9 grade coal annually to operate at rated capacity. However, Singareni Collieries, which produces an average of 60 million tonnes of coal per year, generates only 4 million tonnes of G9 grade quality. Government sources contend that the previous administration overlooked this critical shortfall when establishing the project.

A coal supply agreement was signed with Singareni Collieries in 2022, but the company is unable to meet the required quantities. Although there are arrangements to source quality coal from new greenfield mines, the previous government did not permit Singareni to participate in coal block auctions.

The ultra-supercritical thermal power station was launched in 2015 with a three-year completion target, and the construction contract was awarded to BHEL on a nomination basis. The initial plan envisaged commissioning the first two units by October 2020 and the remaining three by October 2021. As of now, only one unit remains incomplete.

Government sources note that thermal power plants operate more economically when located near coal mines, as this reduces transportation costs. However, the YTPS site is 270 km away from Singareni's mines. Transporting coal over the plant's estimated 40-year lifespan is expected to add ₹40,000 crore to generation costs, potentially doubling the normal cost of ₹5 per unit.

In response, the government and Genco are now planning to source the required quality and quantity of coal from Mahanadi Coalfields or Coal India, following instructions from Chief Minister A. Revanth Reddy.