Sasan Ultra Mega Power Project
Sasan Ultra Mega Power Project is one of the Ultra Mega Power Projects proposed by the government of India.
The undated satellite photo below shows the power station in Sasan (Shasan) village, in the state of Madhya Pradesh.
On its website in 2010, Reliance Power states that the project will comprise six 660 MW coal-fired supercritical units. "The Sasan project is scheduled to be on-stream by December 2013, when the first 660 MW unit comes on-line. The project is scheduled to be fully commissioned by April 2016. The estimated cost of the Sasan project is Rs. 18,342 crore, which includes the initial capital costs related to the mining of coal," Reliance Power states.
The company states that a "Power Purchase Agreement has been executed with 14 Procurers comprising 7 States and their off take would be as follows; Madhya Pradesh (Lead Procurer) will be entitled for 37.50% share, followed by Punjab(15%), Uttar Pradesh(12.5%), Delhi(11.25%), Haryana(11.25%), Rajasthan(10%) and Uttarakand (2.5%)."
In August 2015, Reliance Power asked India’s Power Finance Corporation (PFC) to buy out the project, citing a "breach of representation." When the project was awarded the Sasan UMPP had three mines - Moher, Moher Amlrohi extension and Chhatrasal - with an aggregate capacity of 760 million tonnes. In May 2015, the coal ministry cancelled the allocation of the Chhatrasal block, saying the three mines exceeded the amount of coal to be used by the plant. Reliance argued the coal reserves of the remaining two mines are not enough for the plant to run at a plant load factor of 85 per cent for the power purchase agreement term of 25 years. The PFC has not responded to Reliance's request.
The company applied to expand the power station by three units of 660 MW in 2011.
The expansion was recommended for environmental clearance in February 2014. However, the India Ministry of Environment, Forests, and Climate Change (MoEF) sought clarification from the state government over whether a stand-alone thermal power plant could be set up in the same land allotted to the Sasan expansion, and using the same water allocation. The state government replied that the PPA for Sasan UMPP does not have any provision regarding use of land, water, and other infrastructures for non- UMPP purposes.
As of October 2016 the proposed units have yet to receive environmental clearance.
The proposed units are not mentioned in the Reliance Power 2015/16 Annual Report or on the October 2016 Broad Status Report, and it appears that the expansion of the UMPP is not longer being actively pursued.
Reliance Power states that the power station will be located "approximately 25 km from three captive pithead coalmines." The mines are Moher, Moher-Amlohri extention and Chhattrasal. The company stated in a media release in 2007 that power station is expected to consume over 15 million tonnes per annum of coal "making it the single largest captive coal mining operation by private sector in India across any industry."
The coal for the proposed plants is slated to come from the Moher coal mine, the Moher-Amlori Extension coal mine and the Chhatrasal coal mine. While Reliance described the coal mines as captive, in 2009 the prospect that coal from these mines could be dispatched to other markets became the subject of legal action.
In May 2015 the coal ministry de-allocated Chhatrasal coal mine, and said excess coal from the Moher coal mine and the Moher-Amlori Extension coal mine could not be used to power Reliance's nearby Chitrangi Power Project. The coal ministry said it is planning to ask Reliance Power to submit a revised mining plan for the two Moher coal blocks.
It has been reported that the "Baiga tribals in and around the Moher forests in Singrauli have been living in the project areas. These tribal people do not have any legal documents or land records to prove their customary rights over the land. This has deprived them of a right to rehabilitation and compensation. Villagers are not sure if they can get any compensation after the land was acquired for the Sasan project."
In April 2009, a financing agreement for the project was closed. US$2,922.82 million in loans was provided by the Bank of Baroda, Punjab National Bank, Life Insurance Corporation of India, United Bank of India, Power Finance Corporation, Rural Electrification Corporation, IDBI Bank, Corporation Bank, Axis Bank, Andhra Bank, India Infrastructure Finance Company, and State Bank of India. US$977.63 million in equity was provided by Reliance Power. SBI Capital Markets acted as financial adviser to the sponsor, and Power Finance Corporation acted as financial adviser to the government.
In December 2011, a refinancing agreement for the project was closed. US$2,181.00 million in loans was provided by the China Development Bank, China Exim Bank, Bank of China, Standard Chartered Bank, DBS Bank, Mizuho Financial Group, and Export Import Bank of the United States. Standard Chartered Bank acted as financial adviser to the sponsor.
However, later, the Export Import Bank of the United States revised its loan commitment from US$917 million to $650 million.
In April 2020, an additional loan agreement for "additional capital cost and operational expenditure for installing and operating emission control systems" was closed. US$220.26 million in loans was provided; however, the source of the loans is unknown at this time.
- Units 1-6: Operating
- Units 7-9: Cancelled
Nameplate capacity: 6 x 660 MW
- Unit 1: Commissioned March 2013
- Unit 2: Commissioned January 2014
- Unit 3: Commissioned April 2014
- Unit 4: Commissioned May 2014
- Unit 5: Commissioned August 2014
- Unit 6: Commissioned March 2015
Coal Source: Moher coal mine, Moher-Amlori Extension coal mine
Estimated annual CO2: 23,654,803 million tons (Units 1-5)
Source of financing: US$2,922.82 million in debt from the Bank of Baroda, Punjab National Bank, Life Insurance Corporation of India, United Bank of India, Power Finance Corporation, Rural Electrification Corporation, IDBI Bank, Corporation Bank, Axis Bank, Andhra Bank, India Infrastructure Finance Company, and State Bank of India; US$977.63 million in equity from Reliance Power; US$1264 million in debt from the China Development Bank, China Exim Bank, Bank of China, Standard Chartered Bank, DBS Bank, and Mizuho Financial Group; US$650 million in debt from the Export Import Bank of the United States; US$220.26 million in debt from unknown sources
Permits and applications:
- Environmental clearance for 4,000 MW power station, India MoEF, July 21, 2009
- Terms of reference for units 7-9, India MoEF, May 23, 2011
U.S. Export-Import Bank rejects loan ... and then changes its decision
In late June 2010 the Export-Import Bank of the United States rejected Reliance Power's request for a $650 million loan for the project. "We’re not doing the deal," the banks spokeswoman Stephanie O’Keefe told Bloomberg. Doug Norlen, policy director for Pacific Environment said that the decision set an important precedent. "It’s the first time Ex-Im ever turned down a project based on the climate implications," he said. A bank spokesman said that the board of directors voted 2-1 against the project.
Days after turning down the request by Reliance, state Democrats complained that 1,000 jobs would be lost if the deal didn’t go through, and on the eve of a visit from President Obama to Wisconsin, the bank asked Reliance to submit a revised bid that added a pledge to build “among the largest renewable projects built in India to date” with the help of American green tech. The protests of equipment manufacturers were taken up by several members of Congress, including Republican Congressman Jim Sensenbrenner, who serves on the House Committee on Energy Independence and Global Warming. In a letter to President Obama Sensenbrenner wrote that "denying jobs to American workers is no way to address climate changes or energy independence. India will still build the coal-fired plant, just not with U.S. money or equipment."
In July 2010, the bank reversed its decision. The bank calls the situation “a win-win” for the environment and exporters. Some environmentalists call it greenwashing. "They collapsed like a wet paper bag," says Doug Norlen of the nonprofit group Pacific Environment.
A July 14 Ex-Im Bank press release stated the agency’s renegotiated financing for Sasan will result in a new 250-MW renewable energy project: “[S]ubsequent to that [renegotiated] vote, Reliance Power has executed a memorandum of understanding (MOU) with Ex-Im indicating Reliance's intent to develop a new 250 megawatt renewable energy facility, which when built will rank among the largest renewable energy projects in India.” Ex-Im Bank Chairman Fred Hochberg later echoed this claim in sworn testimony to Congress, saying that following the renegotiation, the Sasan project sponsor, Reliance Power Ltd., “executed a Memorandum of Understanding agreeing to supply 250 MW of renewable energy sourced from the United States.”
However, Friends of the Earth says it obtained a copy of the MOU through the Freedom of Information Act, and that the MOU reveals Hochberg’s statements are false. The MOU refers to potential Ex-Im Bank support for “current planned investments to build 250 megawatts of renewable energy power plants,” showing the renewable energy projects were already planned. Also, the MOU is signed just by Hochberg--not by Reliance Power, the project sponsor. Ex-Im is now considering an even bigger coal project, the Kusile Power Station, in South Africa.
In October 2012, the US Ex-Im Bank said it was inquiring into construction safety, community resettlement, and greenhouse gas emissions from the Sasan project after concerns were raised by local residents and environmental groups such as the Sierra Club.
As of July 2011, five "high-efficiency" coal power plants, including Sasan, were registered under the UN's Clean Development Mechanism -- four in India and one in China -- meaning they are all eligible to earn certified emissions reductions (CERs) that they can sell. The five registered power projects involve two from Reliance Power totalling 8,000 MW, two projects totalling 2,640 MW from Adani Power and a 2,000 MW ultra-supercritical plant by Shenergy in China.
According to U.N. data, the five projects are eligible to receive a total of 68.2 million CERs over a 10-year crediting period. That is worth 661 million euros ($919 million) based on current prices of CERs traded on the European Climate Exchange of 9.70 euros.
Reliance's Krishnapatnam Ultra Mega Power Project will receive 12.3 million CERs and the firm's other 4,000 MW plant, Sasan Ultra Mega Power Project in Madhya Pradesh, will receive 22.5 million. Total carbon dioxide emissions from the five projects, based on data from project design documents, over the 10-year crediting period is 673 million tonnes.
Articles and resources
- Rebecca Petchey, Michael Lampard and Alan Copeland, Thermal coal", Australian commodities, ABARE, Volume 17 number 1, March quarter 2010, page 155.
- Amiti Sen & Subhash Narayan, "States make case for second UMPP with advanced land clearances", Economic Times, (India), March 20, 2010.
- Reliance Power, "Projects: Sasan Power Limited", Reliance Power website, accessed May 2010.
- "Sasan UMPP," Reliance Power website, accessed Sep 2014.
- "Last unit of Sasan UMPP commissioned," Business Standard, Mar 30, 2015
- "R-Power asks PFC to buy out Sasan UMPP," Business Standard, Aug 29, 2015
- Terms of reference for units 7-9, India MoEF, May 23, 2011.
- Remarks on project posted on the website of the Ministry of Environment, Forests and Climate Change, Government of India, accessed April 2015
- "Destination-Singrauli," accessed March 2012
- Reliance Power, "Sasan Power Limited transferred to Reliance Power Limited", Media Release, August 7, 2007.
- "It's Tata vs Ambani over Sasan power project", Rediuff.com, January 5, 2009.
- Sarita Singh,"Reliance Power Sasan mine allocation cancelled," Economic Times, May 12, 2015
- "Sasan Ultra Mega Power Project, India" Environmental Justice Atlas, accessed May 26, 2014.
- "Preview of Sasan Ultra Mega Power Plant (3.96GW) | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-10-26.
- "Preview of Sasan UMPP Refinancing 2011 | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-10-26.
- "Report on the Project Financing of Sasan Power Limited" (PDF). exim. September 28, 2015.
- "Preview of Sasan Ultra Mega Power Plant (3.96GW) Additional Facility 2020 | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-10-26.
- "Reliance Power commissions fourth 660 MW unit of Sasan UMPP," Press Trust of India, May 20, 2014.
- "Reliance Power commissions 5th unit of its Sasan UMPP," PTI, Aug 26, 2014.
- Mark Drajem, "Reliance Power’s India Plan Rejected by U.S. Export-Import Bank", Businessweek, June 26, 2010.
- "Exim decision on R-Power may affect Bucyrus's $310-mn order", The Economic Times (India), June 27, 2010.
- "Ex-Im Bank to finance US$600M power plant in India", Breakbulk Online, July 13, 2010.
- "It’s Not Easy Being Green", Newsweek, July 16, 2010.
- "Green Groups Blast U.S. Financing for Massive Coal Project" Sustainable Business, Oct. 22, 2010.
- Neha Sethi and Utpal Bhaskar, "R-Power’s Sasan project under Exim Bank lens: Safety, resettlement, environmental issues being inquired into after concerns raised by locals, activist groups," LiveMint, Oct 15 2012.
- David Fogarty, "Carbon credits for India coal power plant stoke criticism" Reuters Africa, July 12, 2011.
Related SourceWatch articles
- India and coal
- Reliance Power
- Tilaiya Ultra Mega Power Project
- Krishnapatnam Ultra Mega Power Project
- Proposed coal plants in India
- "The U.S. Export-Import Bank's Dirty Dollars: U.S. tax dollars are supporting human rights, environment, and labor violations at the Sasan Coal-Fired Power Plant and Mine," Sierra Club, 350.org, Carbon Market Watch, Pacific Environment, and Friends of the Earth report, October 2014
- "Report on the social and environmental issues of the Sasan project," Bank Information Center, 2013.
- "Indian Sasan Coal Fired Power Project Factsheet," Sierra Club