JAIPUR / NEW DELHI – The ambitious ₹15,000 crore coal-based expansion of the Chhabra Thermal Power Plant in Rajasthan has hit a major roadblock. Regulatory glitches and unresolved logistical issues have led to the likely cancellation of the Memorandum of Understanding (MoU) between NTPC Limited and the Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL).

The proposed project, which aimed to add 1,320 MW (two units of 660 MW each) to Rajasthan’s power hub, is now shrouded in uncertainty as the state reassesses its thermal energy strategy.

The Energy Assessment Committee (EAC) Findings

The project's status came under intense scrutiny during a review by the Energy Assessment Committee (EAC) in August 2025. The committee’s findings highlighted a growing reluctance to rely on non-binding MoUs for long-term power planning:

• Status vs. Intent: The EAC clarified that an MoU is merely a "preliminary expression of intent" and does not constitute a binding commitment to project commissioning.
• Regulatory Roadblocks: RVUNL informed the committee that the expansion remains in early stages due to unresolved regulatory approvals, fuel transfer arrangements, and coal logistics.
• Risk Assessment: The committee resolved that such projects should not be automatically presumed to be "tied-up capacity" in national resource adequacy assessments.

Key Issues Leading to the Impasse

Industry sources indicate that the partnership between the central PSU and the state utility faced several persistent challenges:

• Ownership & Control: Roadblocks emerged over the joint venture's management structure, with NTPC reportedly seeking management control—a point of contention for state authorities.
• Fuel Security: Uncertainties regarding coal linkage and the mechanism for fuel transfer made it difficult to commit the massive capital required.
• Tariff Concerns: Bodies like the All India Power Engineers Federation (AIPEF) had previously warned that the JV might lead to higher electricity tariffs for Rajasthan consumers due to the return on equity (RoE) models used by central regulators.

Rajasthan's Shifting Thermal Landscape

While the Chhabra expansion stalls, the Rajasthan government is focusing on other thermal projects with higher execution certainty.