To meet electricity demand, TN to revive stalled Ennore thermal expansion

Chennai, Jan 10 The Tamil Nadu government has taken a fresh step to revive the long-delayed expansion of the Ennore Thermal Power Station, inviting bids to complete the project through a public-private partnership (PPP) model amid mounting electricity demand in the State.

The Tamil Nadu Power Generation Corporation Limited (Tamil Nadu Power Generation Corporation Limited) has issued tenders to set up a 1×660 MW supercritical coal-fired thermal power unit at Ennore on a design, build, finance, own and operate (DBFOO) basis.

TANGEDCO will function as the nodal agency on behalf of the Tamil Nadu Power Distribution Corporation Limited (Tamil Nadu Power Distribution Corporation Limited), which will procure electricity from the project under a long-term power purchase agreement (PPA).

The expansion project was originally approved by the State government in March 2012 to augment generation capacity at the Ennore complex.

An engineering, procurement and construction (EPC) contract was awarded to a private firm in May 2014, with the unit scheduled to be commissioned by January 2018.

However, construction came to a standstill due to the contractor’s financial distress, and by March 2018, physical progress had fallen below 20 per cent. The contract was terminated the following month.

In a subsequent attempt to salvage the project, the partially completed works were re-awarded to another firm in December 2019 on an "as-is-where-is" basis.

That effort too failed to gain momentum, and the contract was terminated in February 2024, citing unsatisfactory execution, leaving the project idle for several years.

Against this backdrop, the State has opted for the PPP route, citing the urgent need to add reliable base-load capacity. The revived project will have an installed capacity of 660 MW, of which 617 MW will be contracted for supply to the State utility.

Power generation is expected to commence within 48 months from the appointed date. Under the tender conditions, the successful bidder will be responsible for completing the remaining works, arranging project finance, operating and maintaining the plant, and supplying power under a long-term agreement.

The project will be awarded to the bidder quoting the lowest tariff, comprising a fixed charge and a fuel charge.

The fixed charge will be linked to plant availability, while the fuel charge will depend on actual generation using coal supplied through an allocated linkage.

The revival comes at a time when Tamil Nadu's power demand is rising sharply.

Peak demand has increased by over 6,000 MW in the past eight years, touching 20,830 MW in May 2024, well-ahead of projections. Official estimates indicate peak demand could exceed 21,700 MW by 2026–27 and cross 28,000 MW by 2031–32, intensifying the need for additional generation capacity.

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