POWER October 2014 - 32

TOP PLANTS
Sesa Sterlite Captive Power
Plant, Jharsuguda, Odisha, India
Owner/operator: Vedanta Resources PLC
Courtesy: Sesa Sterlite LLC
Operating a coal-fired plant of any sort in India is a challenge these days, but Sesa Sterlite's
1,215-MW plant is also tasked with supplying vital power to an adjacent aluminum
smelter. Despite a difficult regulatory environment and ongoing coal market difficulties,
the plant has not just met expectations but has risen well above them.
Thomas W. Overton, JD
T
his is a tough time to be running a business
as power-intensive as aluminum
smelting in India.
The economic boom that has lifted many
of the nation's 1.2 billion citizens out of persistent
poverty has deeply challenged its ability
to meet their electricity demands. Despite
significant advances over the past two decades,
one-quarter of the country-roughly
300 million people-still lacks access to electricity.
Yet India has the world's third-largest
installed capacity after the U.S. and China,
and is the fourth-largest electricity consumer
after the U.S., China, and Russia.
Many of India's problems stem from a
dependence on coal. Despite efforts to foster
wind and solar energy (see " Despite Challenges,
India Banks on Renewable Energy "
in the May 2014 issue) and other resources
such as hydropower, coal still accounts for
32
nearly 60% of the nation's installed capacity.
Though India has abundant coal resources, it
has been unable to produce enough to meet
its needs, leading to persistent fuel supply
challenges.
In April 2012, the national government
took the unusual step of ordering national coal
supplier Coal India to sign supply agreements
with power generators, threatening penalties if
supplies fell below 80% of its commitments.
India's chronic coal shortages have stemmed
from a mix of domestic problems-many coal
deposits are located in protected areas or tribal
regions-and heightened competition from
other coal-consuming Asian nations such as
China. Even coal export behemoth Indonesia
has recently looked at cutting its exports to
meet domestic power demand (see " Indonesia
Eyes Tightening Coal Exports " in the August
2014 issue). The result has been a national coal
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deficit in India that has exceeded 100 million
metric tons a year.
Meanwhile, India's heavily regulated
power sector has struggled to find a balance
between ever-growing demand, social justice
concerns, and difficulties in expanding generation
capacity. Ambitious plans to build a fleet
of huge modern ultrasupercritical coal plants,
announced in 2005, have fallen well short of
their goals. Only one such plant has been fully
commissioned, Tata Power's 4-GW Mundra
Ultra-Mega Power Plant (a POWER 2013 Top
Plant), while another, Reliance Power's sixunit
Sasan plant, is nearing completion.
Even the Mundra plant has struggled with
profitability after the government voided its
coal supply agreement with Indonesian producers,
a move that caused its fuel costs to
nearly triple. Problems such as these have left
investors skittish about funding generation
POWER | October 2014

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POWER October 2014

Table of Contents for the Digital Edition of POWER October 2014