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Govt moots state-owned power trading company

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New Power Policy looks at short-term energy security during low-generation months

SHILLONG, June 16: The Meghalaya government’s Power Policy 2024 will facilitate the formation of a state-owned power trading company.
A look at the policy shows much of the demand in Meghalaya is met through hydropower generation. The state, thus, has surplus power during the monsoon season and a deficit during winter, which lasts from November to March.
Apart from the long-term contracts, the state depends on the procurement of power from short-term and bilateral sources to meet the shortfall. The procurement is carried out by the Meghalaya Power Distribution Corporation.
To handle the management of power in the short term, the policy prescribes the outsourcing of this responsibility to a dedicated entity to be incorporated as a state-owned power trading company.
The major objectives of the power trading company shall be to execute power purchase agreements with trading companies, central generating stations, state utilities and other companies, undertake short-term power purchase and sale on behalf of the Meghalaya Power Distribution Corporation Limited and finalise tender and contracts for power purchase from new generation plants (both under state and central sectors), including independent power producers.
The policy also talks about the development of hydropower projects.
It says the government of Meghalaya would provide financial assistance for the development of hydropower projects, including 7.5% of the capital cost for projects up to 25 MW, 5% of the capital cost for projects above 25 MW up to 100 MW, and 2.5% of the capital cost for projects above 100 MW.
“In case the projects lie within the government land, the land shall be leased out to the developer at the notional rate of Re 1 per acre. The land shall be leased out for a period of 45 years including the period of construction,” the policy adds.
The policy also lays focus on the development of pumped storage hydro projects and thermal projects.
According to policy, the state has a coal reserve of about 564 million tonnes, the calorific value of which ranges from 5,694 kcal/kg to 9,772 kcal/kg. The sulphur content of the coal ranges from 1.8% to 7.1% and the ash content from 1.3% to 62%.
The major coal reserves are in the southern belt of the state. Very close to these major coal reserves, there are huge quantities of limestone estimated at 1,000 million tonnes. Thus, there is ample scope to develop thermal power stations to meet the base load demand of the state, the policy says.
“The state-owned Meghalaya Power Generation Corporation Limited, which has abundant experience in developing hydropower projects, can also form a joint venture with a reputed firm having experience in development of thermal power projects of 250-500 MW capacity on revenue sharing basis,” the policy adds.
The policy further says the National Institute of Wind Energy has an estimated potential of 44 MW of wind energy in the state at 50m level and can be increased to 82 MW at 80m level.
The policy aims at harnessing the wind potential in the state to a maximum level both at 50m and 80m by 2030.

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