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The Union budget for 2024-25 is likely to announce a support scheme for setting up 800 MW coal-based power plants through the newest Advanced Ultra Supercritical (AUSC) technology

A proposal to offer about ₹6,000 crore viability gap funding (VGF) mooted by the heavy industries ministry is being evaluated by the finance ministry, people familiar with the development told ET
A ₹3,500 crore payment security mechanism for electric buses is also being considered, they said, adding that a final call would be taken closer to the budget

The proposed project will be based on indigenous technology developed through a consortium of Bharat Heavy Electricals Limited, Indira Gandhi Centre for Atomic Research and NTPC. The central government has spent ₹1,554 crore on developing the technology.

"Advanced Ultra Supercritical projects are more expensive than conventional coal-based projects. A VGF is needed for keeping tariffs from these newer projects in tandem with existing ones so that power purchase agreements with state government-controlled distribution companies can be secured comfortably," said a senior government official, who did not wish to be identified. Sector watchers said the new project would cost well upwards of ₹15,000 crore at completion. The Centre last week announced VGF for 1 GW of the country's first offshore wind energy projects, which were recently approved for development. Last week the Union cabinet approved VGF of ₹7,453 crore for the wind project to keep power tariffs below ₹4.5 per unit, roughly the average cost of electricity supply from the country's thermal plants.India currently has 444.77 GW of power generation capacity, of which 243 GW is coal-based.

Performance of thermal power projects is measured in plant efficiency. Higher efficiency means lesser coal consumption and more power output achieved through increasing the temperature and pressure in a boiler. The AUSC technology-based thermal power plants will yield a plant efficiency of 46% against about 38% efficiency of subcritical and up to 42% of supercritical sets. This will be in addition to reducing coal consumption and carbon dioxide emissions by about 11% as compared to the most modern super-critical plants in existence.

The payment security mechanism will provide a major fillip to electric bus makers that have been shying away from tenders to supply these vehicles to state governments. The central government-funded mechanism will give a cushion to bus makers, providing assurance of payments in case of disputes with states.