NTPC Chhabra coal expansion MoU plan likely to seek cancellation due to critical issues

NTPC’s Rs 15,000 crore coal expansion plan at Rajasthan’s Chhabra Thermal Power Plant may be cancelled due to regulatory hurdles, fuel logistics issues, and approval delays, raising uncertainty over the proposed 1,320 MW capacity addition.

New Delhi: State-run NTPC Ltd’s highly anticipated Rs 15,000 crore coal expansion plan of Rajasthan’s Chhabra Thermal Power Plant is not going to move forward with some regulatory glitches indicating that the Memorandum of Understanding (MoU) signed between the Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL) and NTPC Ltd has been critically reviewed and cancelled due to consistent issues trending on.

The development officially revealed the uncertainty of the plans which would add 1,320 MW of coal-based capacity, through two units of 660 MW each, in the region of one of the power hubs, has grown out with reluctance to further move-on for the power capacity expansion. The status of the Chhabra coal expansion has came into limelight of the Energy Assessment Committee (EAC) in Aug, 2025.

The committee has reviewed that whether projects are supported by the PSUs agreement only to assured capacity under resource adequacy assessment. As per the officials, RUVNL has informed the committee about MoU based CPSU projects is still remains on the early stage of development and is likely to be unaffected because of the unresolved regulatory approvals, fuel transfer arrangements and coal logistics which ultimately makes their execution uncertain right now.

After considering these submissions, the EAC has resolved that such projects should not be automatically presumed to be tied-up capacity and must be examined individually. Therefore, in the Chhabra case, the committee has pointed out that the agreement signed with the NTPC for extending the thermal power station had been reviewed and is subject to likely cancelled due to some persisting critical issues.

The cited document is clearly showing a difference between an MoU and a binding project agreement and noted further that the MoU is only a preliminary expression of intent between a state government and public sector undertakings, aiming to facilitate land availability, statutory clearances, coal arrangements, and other infrastructure sources. The submission stated that the viability of such projects depends on subsequent techno-economic source, regulatory approvals, coal logistics, and power purchase agreements and does not prone to commitment on project commissioning.

The Chhabra Thermal Power Plant in Rajasthan’s Baran district is currently having an installed capacity of 2,320 MW, comprising four units of 250 MW and two units of 660 MW, operated by RVUNL. This NTPC-led proposed expansion was expected to boost up the power portfolio with a proposed investment of Rs 15,000 crore for the additional 1,320 MW, one of the largest coal-based expansion plans in the state.

The state has on another side approved additional coal-based capacity plans including expansion at the Kalisindh Thermal Power Project where regulators are now tightening scrutiny on projects to step aside uncertainty.