The AP-Genco may is in the process of rethinking of setting up a pit-head Thermal Power Plant (TPP) at the newly discovered coal mines at Chintalapudi in Eluru district in the near future as the seams there are reportedly found to be more of shale in nature, whose calorific value is sub-optimal.

The power utility is currently sourcing the coal required by all of its TPPs from the Mahanadi Coalfields and Singareni Collieries at high Cost of Transportation (CoP).

By setting up a TPP at the close-by Chintalapudi coal mines, the CoP (which accounts for almost 50% of the variable cost of TPPs in the State) can be reduced substantially, but the substandard quality of coal is learnt to have discouraged AP-Genco from taking the proposal forward from the concept stage.

The TPPs need coal that has high calorific value and low ash content, or at least lignite, which comes next in the order of quality, whereas the shale deposits do not meet those quality specifications.

This is what made AP-Genco sceptical about establishing the TPP at the pit-head even as the Central government pushed the Chintalapudi coal mines down the list of allocable coal blocks due to the quality issue, highly placed sources in the Energy Department according to a report in The Hindu.

The AP-Genco has to consider setting up new TPPs in the future to maintain the base load after closing down obsolete thermal units by the year 2030 as per the Central Electricity Authority guidelines.