Ultra Mega Power Projects

Ultra Mega Power Projects (UMPP) are a series of ambitious power stations planned by the Government of India.This would entail the creation of an additional capacity of at least 100,000 MW by 2022. Ultra Mega Power projects, each with a capacity of 4000 MW or above, are being developed with the aim of bridging this gap.

The UMPPs are seen as an expansion of the MPP (Mega Power Projects) projects that the Government of India undertook in the 1990s, but met with limited success. The Ministry of Power, in association with the Central Electricity Authority and Power Finance Corporation Ltd., has launched an initiative for the development of coal-based UMPP's in India. These projects will be awarded to developers on the basis of competitive bidding.

Based on supercritical technology, 16,000 MW of capacity has been contracted through the competitive bidding process for UMPPs. The average tariff for these projects is in the range of ₹2-3 per kwh which is much lower than the recent cost plus tariffs. The first UMPP, developed by Tata Power at Mundra, Gujarat has been commissioned and contributes 4,000 MW in power to the Western grid.

Special purpose vehicles (SPV), or shell companies, have been set up as wholly owned subsidiaries of the Power Finance Corporation for each UMPP that will be built. The SPV obtains various clearances, water linkage, coal mine allocation (for domestic coal based projects) etc. for the project. The SPV also initiates action for land acquisition in the name of the SPV, selects the developer through a tariff based competitive bidding process and finally transfers the SPV to the identified developer along with the various clearances, tie ups, etc. The developer is then responsible to build–own–operate (BOO) these UMPP plants.

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