Chennai R-LNG projects hindered by asset relocation delay

Tangedco's plans to establish re-gasified liquefied natural gas (R-LNG) power projects, ranging from 18-20 MW with a total capacity of 2,000 MW as part of its zero-carbon initiative, have encountered a setback due to the delay in relocating assets from the decommissioned Ennore thermal plant. About 100 acre of land were needed for these projects, and the state had decided to utilize the decommissioned Ennore plant. However, assets like transformers and power cables remained on the premises, causing a delay. Tangedco floated tenders to sell the equipment on October 24. However, the initial bids quoted low prices. We are hoping for more reasonable rates. E Natarajan, state general secretary of Bharatiya Electricity Engineers Association, pointed out that setting up an R-LNG power plant would cost Tangedco at least Rs 100 million per MW, resulting in an approximate total project cost of Rs 20,000 crore. Additionally, the cost of power generation using natural gas would be as high as Rs 18 per unit, compared to Rs 5 for hydro, solar, and wind power projects. Natarajan suggested that Tangedco should consider solar or wind projects instead, given the utility's substantial losses. S Nagalsamy, a former member of the Tamil Nadu Electricity Regulatory Commission, emphasized the rise in generation costs and urged Tangedco to carefully weigh the advantages and disadvantages before proceeding with R-LNG plants. He also proposed the adoption of wind and solar power projects with battery storage facilities as an alternative. In response, a senior official stated, Wind and solar power generation might only be possible during certain seasons, and thermal power stations could take up to 6 hours to start. However, natural gas power projects could become operational within just 30 minutes. The utility is currently discussing the best path forward.