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VOL. I · EST. 11.2025 
SatyaDheesh
सत्याधीश
India's Ground Truth Record
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Keralam to get low-cost electricity at ₹5.18 per unit from Sinnar thermal project

GS3Economy · S&T · Environment · Security· Infrastructure (energy, ports, roads, railways)· Prelims·

Inter-state power purchase agreements: a GS3 case study on energy security and tariff stabilization.

Why in news

Keralam Chief Minister V.D. Satheesan announced a power purchase agreement (PPA) to procure low-cost electricity at ₹5.18 per unit from the Sinnar thermal power project in Maharashtra.

Background

The Sinnar thermal power project is a joint venture between NTPC Ltd and MAHAGENCO located in Nashik, Maharashtra. It is slated to provide 540 MW of power to Keralam, with a target to potentially increase supply to 1,000 MW.

Facts for Prelims

  • FactThe agreed electricity supply cost from the Sinnar project is ₹5.18 per unit.
  • BodyThe Sinnar thermal power project is a joint venture between NTPC Ltd and MAHAGENCO.
  • PlaceThe Sinnar thermal power project is located in Nashik, Maharashtra.
  • FactThe initial power allocation for Keralam is 540 MW, with a long-term duration of 25 years.
  • FactThe expected commencement of power supply from the project has been moved forward to March.

Prelims practice question

With reference to the Sinnar thermal power project, consider the following statements:

  1. The agreed electricity supply cost is ₹5.18 per unit.
  2. The project is a joint venture between NTPC Ltd and MAHAGENCO.
  3. The project is located in the state of Kerala.

Which of the statements given above is/are correct?

  1. (a)1 only
  2. (b)1 and 2 only
  3. (c)2 and 3 only
  4. (d)1, 2 and 3
Show answer

Answer: (b) 1 and 2 only — Statements 1 and 2 are correct. Statement 3 is incorrect: The project is located in Nashik, Maharashtra.

For Mains

Q. Discuss the significance of inter-state power purchase agreements in ensuring energy security and stabilizing electricity tariffs for power-deficit states in India.

Dimensions to cover in your answer

  • Inter-state cooperation: Leveraging surplus generation from joint ventures to stabilize regional power grids
  • Fiscal impact: Reducing per-unit costs through long-term PPAs to lower industrial and domestic electricity tariffs
  • Infrastructure synergy: Utilizing Maharashtra's coal-based capacity to meet Keralam's energy demands

Keywords: Power Purchase Agreement · Energy Security · Inter-state Trade · NTPC · MAHAGENCO · Electricity Tariff

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