Nalco, NLC India to build 1,080 MW power plant with ₹12,000 cr investment

Central public sector enterprise National Aluminium Company (Nalco) has partnered with NLC India (NLCIL) to set up a 1,080 megawatt (MW) captive thermal power plant at Angul in Odisha to support its aluminium capacity expansion.

The two Navratna public sector companies have signed a joint venture-cum-shareholders' agreement to establish a 50:50 joint venture that will develop a 4x270 MW captive thermal power plant within Nalco's existing captive power complex at Anugul.

The project assumes significance as Nalco is undertaking a 0.5 million tonne per annum (mtpa) expansion of its aluminium smelter at Anugul, scheduled to be commissioned in 2030-31. Aluminium smelting is among the most electricity-intensive industrial processes, and the expansion is expected to require an additional 800 MW of uninterrupted captive power.


Nalco said the new thermal power plant has been conceived primarily to meet this requirement, ensuring a reliable and cost-effective electricity supply for the expanded smelting operations. The power project, part of Nalco's ₹30,000 crore expansion programme, will be developed with an investment of around ₹12,000 crore.

The proposed captive power station will be developed in phases as a brownfield expansion within Nalco's existing power plant premises, allowing the company to leverage existing land, infrastructure and utilities while reducing project execution time and costs.

With a total installed capacity of 1,080 MW, the project will meet the immediate power requirement of the expanded smelter while providing operational flexibility for future capacity additions.

"Under the agreement, the joint venture company will enter into a 25-year power purchase agreement (PPA) with Nalco for 100 per cent of the electricity generated by the plant and a long-term fuel supply agreement with NLCIL for coal at Coal India notified prices," Nalco said in a statement.

Sources said NLC India will leverage its mining expertise and coal resources, including output from its Machhakata coal mine in Odisha, located close to the Anugul project site, to ensure uninterrupted fuel supplies throughout the plant's operational life.

The arrangement is expected to provide Nalco with assured power availability while creating a stable revenue stream for the joint venture. Power accounts for nearly 35-40 per cent of aluminium production costs, and Nalco expects captive generation to shield it from fluctuations in market electricity tariffs.

The collaboration also incorporates Nalco's clean energy roadmap. The company plans to procure 200-250 MW of firm renewable energy to meet Renewable Consumption Obligation (RCO) norms. NLC India will facilitate this through long-term power purchase agreements or group captive arrangements from its renewable energy portfolio, helping Nalco reduce the carbon footprint of its aluminium production while meeting regulatory requirements.

The agreement was signed in New Delhi in the presence of Union Coal and Mines Minister G Kishan Reddy, Sanoj Kumar Jha, Additional Secretary in the Ministry of Coal and in-charge Chairman and Managing Director of NLC India, and Brijendra Pratap Singh, Chairman and Managing Director of Nalco.

The agreement follows the non-binding memorandum of understanding signed earlier between Nalco and NLC India, which outlined collaboration in thermal and renewable energy projects and long-term coal supply. The latest pact converts that framework into a concrete investment plan supporting Nalco's next phase of capacity expansion.