NTPC's naphta-fired Kayamkulam power plant in danger of closure

 NTPC`s naphtha fired Kayamkulam power plant may be removed after Tamil Nadu and Kerala refused to draw power from it due to the sharp price increase of its power.

It has been shut since June, 201.

Tamil Nadu was drawing 180 MW of expensive Kayamkulam power, but only when goaded with a compensatory 135 MW of cheaper power from the eastern region. However, Kerala refused to draw power from Kayamkulam after it found the sharp rise in the price of naphtha following a global spurt in price and the concomitant increase in Kayamkulam tariff too much to handle, even when pooled with cheaper power.

Kerala too stopped drawing power, claiming that the cost of Kayamkulam power came to an exorbitant Rs 9.70/Kwh and even the pooled rate was an unacceptable Rs 7/kwh.

The Kerala State Electricity Board argued that it was running a monthly loss of Rs 75 crore and couldn`t afford such expensive power particularly when tariff rates to end consumers are not being raised accordingly.

NTPC found itself in a corner with the closure of the plant as it faced serious preservation problems as a consequence. Unless the plant is run at a technical minimum, the cost of preservation is expected to be extremely prohibitive.

According to calculations made, the cost of gas fired plant in Kayamkulam, when pooled with cheaper gas allocated not just to Kerala but also to Tamil Nadu would work out to a reasonable Rs 4.50/Kwh.

Kerala now claims that it will revert back to NTPC soon with a formal response on availability of gas at a pooled price of Rs 4.50/kwh.