Legal Requirements for Setting up Thermal Power Plants India

Legal Requirements for Setting up Thermal Power Plants India

Legal Requirements for Setting up Thermal Power Plants India

Legal Clearances & legal Requirements for Setting up of Coal Thermal Power Plant for Electricity Generation and Distribution in Indian Market

For doing any business following normal formalities needs to be completed:
  • Certificate of Incorporation to start any business.
  • Sale tax registration
  • Income tax PAN Number
  • Payment of tax confirmation, financing arrangements
  • Registration under state employee insurance act 1948
  • Registration under minimum wages act
  • Registration under provident fund act
Clearances required from state government:
  1. Approval of land requirement
  2. Allocation of govt. land
  3. Private land acquisition
  4. Allocation of tribal land
  5. Allocation of land for railway siding
  6. Land for water intake pump house
  7. Right of way (ROW) for laying water intake pipe line
  8. ROW for construction power line
  9. ROW  for power evacuation line
  1. Approval of water drawls from water source such as river/dam
  2. Approval of water intake system design
  3. Permission for use of ground water for construction
  1. Power purchase agreement
  2. Agreement for transmission of power
  3. Approval for construction power
  1. Approval for blasting for preparation of civil works such as leveling
  2. Approval of proposed design and construction as per section 6 of factory act
  3. Approval of electrical inspector for electrical layout
  4. Registration of Boiler and high pressure equipments as per Indian boiler regulation(IBR)
  5. Approval of weigh bridge, weigh scales from weight and measure department
  6. Approval of fuel oil tank installation, Hydrogen gas installation from department of explosives
  1. Essentiality certificate to avail import duty concession
Clearances required from central government
  1. Coal linkage /coal supply agreement/Allotment of coal block 
  2. Fuel transport agreement
  3. Permission for railway siding ROW for rail track
  1. MOE&F clearance
  2. Approval of Rehabilitation and Resettlement plan(R&R)
  3. Allocation of forest land
  1. For construction of chimney/stack 
Other Miscellaneous Clearances
  1. Permission for various imports
  2. Permission for transportation of heavy material on Roads/Bridges
  3. Custom clearance for imported capital goods
  4. CRZ clearance if site is near to coast or for construction of jetty for coal or goods transport
  5. Approval for using telecommunication facilities via satellite
  6. Construction of air strip/helicopter landing strip  
  7. Frequency used for power line carrier communication
  • Availability of required land for final capacity decided for installation.
  • Availability of water source within 10 to 15 km which can supply yearly water requirement.
  • Accessibility by road, rail.
  • Coal transport logistic to meet the daily requirement of coal.
  • Power evacuation facilities
  • Preferably low lying area at a distance of about 5 to 10 km to dump ash.
  • Availability of construction power and water required for construction
  • Availability of construction material such as sand, stone quarry near to site
  • Land in coal bearing area should be avoided
  • Forest land, Habituated, Irrigated/ agricultural land should be avoided
  • Location should be 25 km away from   
            1. Metropolitan city
            2. National Park, Wild life sactuary
            3. Ecologically sensitive areas such as tropical forest, biosphere reserves, important lakes, coastal areas rich in coral formation etc.
  • Location should be 10km away from
            1. Archaeological/historical structure
            2. Cultural/ Religious/ Tourist importance place
            3. Defense installation
  • 500 Meter away from flood plain of river system
  • 500 Meter away from National highway
  • Chimney/stack should not fall in approach funnel of runway of nearest air port
  • Preliminary environmental feasibility including Rehabilitation and Resettlement should be kept in mind
At present capital cost for setting up coal based thermal power plant is about 5.5 Crore Rupees per MW

Following measures may be adopted to reduce the capital cost:
  1. Site shall be located near to railway line, national/state highway, near to sea coast so that cost of approach road is reduced
  2. Site may be located near to availability of construction material so that transport cost can be reduced
  3. In plant layout land cutting and filling may be adjusted so that they balance each other. Low lying areas may be used for water reservoir, ash pond. If required, different buildings of the plant may be kept at different elevations.
  4. Light cladding material may be used instead of brick work where it is possible
  5. Use of locally made fly ash bricks instead of clay bricks
  6. Use of fly ash in road embankment work
  7. Utilization of fly ash to reduce the size of ash pond
  8. Cement and steel may be supplied by project owner to avoid contractor’s margin on these items.
  9. Equipment/plant layout should take care of optimization of steel column and beam sizes as well as optimum use of cables, piping materials
  10. Prefabricated structure may be used in construction of colonies, toilets etc.
  11. Floors in various buildings may be designed for actual equipment loading and not for uniform loading to reduce the size of various structural components
  12. Tender specifications should explicitly cover all the requirements so that no extra work settlement issues crop up during execution
  13. While preparing the tender specifications it should be ensured that multiple vendors are available for procurement of all items to get the price benefit of competition
  14. Tender specification should be very clear so that it can be executed without any disputes at site.
  15. All requisite safety precautions needs to be taken during execution so that no accident takes place and cost and time over run on this account is avoided
Preparation of feasibility report is a must for taking investment decision.
Main stages of any project cycle are as follows:
  1. To establish need of the project
  2. Various alternatives or options to meet desired need
  3. Preparation of feasibility report containing detail information on following
                a. Market i.e. demand and availability gap of power in the country

                b. Technical analysis to confirm specifications and Technical parameters are realistic and optimal
                c. Organizational strength
                d. Managerial capability to implement and operate the project
                e. Consideration of environmental aspects, R & R aspects needs to be covered in detail
                f.  Properly estimated cost of the project
                g. Determination of cost of generation and transmission
                h. Economic analysis of the cost of generation and transmission to confirm project is worthwhile from investment point of view
                i.  Details of project implementation which involves planning, specifications, tendering, placement of order, detailed design and                                  engineering, detail activities for erection and commissioning, O & M after starting the generation.

For getting the approval for the project following inputs/clearances should be in place:
  1. Notification of scheme in state gazette and news papers as per section 29 of electricity act 1948
  2. Confirmation from state authorities for acquisition of proposed land and approval of R & R plan
  3. Confirmation from state authorities /CWC/Ministry of water resources on availability of water
  4. Clearance from state pollution control board
  5. Confirmation for availability of coal from Ministry of coal
  6. Confirmation from Railway authorities regarding permission for railway siding facilities and for transportation of coal from allotted mines
  7. Environmental clearance from MOEF
  8. Clearance from Air port authority for chimney height construction
  9. Clearance from transmission company for transmitting the power
  10. For proper estimate for setting up of coal based thermal power plant following basic engineering needs to be done before preparation of detail feasibility report:
            A) Capacity and unit size to be set up
            B) Estimate of land, water and coal requirement for total capacity of the plant
            C) Soil investigation to decide type of foundation and other civil works
            D) Quantum of earth work and other land development activities involved
            E) Type of cooling water system
            F) Quality of coal for boiler design
            G) Plant layout
            H) Substation and transmission system configuration
             I) Fly ash disposal system and route survey for ash slurry pipe line up to ash pond
            J) Environmental impact assessment as required by MOEF
           K)  Investigation and studies relating to earth quake in that area should be carried out
           L)  Route survey for Railway siding
          M)  Route survey for water pipe line from water source    
Success of project depends upon quality of feasibility report
Feasibility report should be formulated only for most sound and viable project and shall detail out implementation of the project as well as its management after completion

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