Raipur: State-owned NTPC Limited plans to invest around Rs 14,000 crore to set up a coal gasification plant at Talaipalli in Chhattisgarh, with the company expecting around Rs 2,000 crore in Viability Gap Funding (VGF) under the Centre’s coal gasification scheme.
The proposed facility will produce 0.5 million tonnes of synthetic natural gas (SNG) annually. The estimated production cost of the SNG is around $13 per million British thermal units (MMBtu).
NTPC Awaits Viability Gap Funding for Talaipalli Project
NTPC has already acquired the land for the proposed coal gasification project at Talaipalli. According to a senior company executive, the company is waiting for the government to approve the proposal and release the VGF before starting construction work.
NTPC has completed the preliminary feasibility study and Detailed Project Report (DPR) for the project. Construction is expected to begin once the government provides the required approval and financial support.
The company expects the plant to be commissioned within four to five years after work begins.
Read also: NTPC Plans 10 MT Coal Procurement from Commercial Mines in FY27 to Strengthen Fuel Supply
Plant to Produce 0.5 Million Tonnes of Synthetic Natural Gas
The Talaipalli project will convert coal into synthetic natural gas through the gasification process. The facility is planned with an annual production capacity of 0.5 million tonnes of SNG.
NTPC expects the project to be commercially viable and is confident of securing buyers for the gas produced at the plant. The company is also looking to arrange bank financing for the debt-funded project. NTPC is currently in discussions with several technology providers, most of which are foreign companies, for the proposed facility.
NTPC Part of Centre’s Rs 37,500 Crore Coal Gasification Scheme
NTPC was among the seven applicants in the first round of the Centre’s Rs 37,500-crore Scheme for Promotion of Surface Coal and Lignite Gasification Projects. Other applicants included Adani Enterprises, Talcher Fertilisers, Gallantt Ispat and Shyam Sel & Power, among others.
The scheme, approved by the Union Cabinet in May, aims to encourage the conversion of domestic coal and lignite into value-added products, including:
- Synthetic Natural Gas (SNG)
- Methanol
- Ammonia
- Hydrogen
The government is promoting coal gasification as a way to increase the utilisation of domestic coal resources while producing higher-value energy and industrial products.
Government Targets 100 Million Tonnes of Gasification Capacity by 2030
Under the scheme, the government aims to facilitate the use of around 75 million tonnes of coal and lignite and support the development of 100 million tonnes of coal gasification capacity by 2030.
Eligible projects can receive incentives of up to 20 per cent of the eligible plant and machinery cost, subject to a maximum support of Rs 5,000 crore per project.
NTPC to Apply in Second Round of Coal Gasification Scheme
NTPC also plans to participate in the second round of the coal gasification scheme, which opened on September 8.
The Centre has planned fresh application windows every two months to encourage more projects in the sector. The government expects the scheme to attract around Rs 2.5 trillion to Rs 3 trillion in investment across approximately 25 projects.
NTPC’s participation in the second round could help the company explore additional opportunities in coal gasification and value-added products derived from domestic coal.
NTPC Focuses on Domestic Coal-Based Energy Solutions
The proposed Talaipalli project is part of NTPC’s broader efforts to diversify its energy portfolio and explore technologies that can add value to domestic coal resources.
With the planned production of SNG, the project could contribute to reducing dependence on conventional natural gas while supporting the government’s wider push for coal gasification and domestic energy security.
About NTPC
NTPC Limited is India’s largest power utility and a Maharatna Central Public Sector Enterprise under the Ministry of Power. The company is primarily engaged in power generation and has also expanded its operations into areas including renewable energy, coal mining, energy storage, green hydrogen and other emerging energy technologies.
