New 3000-MW power project for southern states

Vol 8, PW 24 (09 Mar 05) Midstream & Downstream

Tamil Nadu, Andhra Pradesh and Karnataka have come together to set up a new 3000-MW gas-based power project exclusively for southern states.

On 21st February, power secretary RV Shahi chaired a meeting in Delhi to explore the possibility of setting up the power plant at either Kakinada or Ennore. In attendance were senior officials from the three state governments, the Central Electricity Authority, Power Trading Corporation, Power Finance Corporation, GAIL, Reliance Energy and GVK Industries.

There is a gap of about 4000-MW capacity to fulfil the original planned target of 41,000-MW under the 10th plan, Shahi told the meeting. To bridge this gap, there could be a possibility of installing a gas-based power project, subject to availability of gas.

Shahi said the project would be worthwhile even if it could not materialise by March 2007, when the 10th five-year plan ends. The project can be commissioned in early 11th plan period, he said.

State officials enthusiastically backed the project. Ennore could be a good location if LNG is to be used as a fuel, K Skandan, Chairman of Tamil Nadu Electricity Board, told the meeting.

Ajay Jain, managing director of APGENCO agreed to make land and water available for the project. Dilip Rau, Karnatakas energy secretary, also gave his backing.

Rau hinted that the Bidadi project appeared to be going nowhere. We are trying to source gas for around $2 per mmbtu but no bidder has submitted a bid, Rau said.

Shahi asked the Power Finance Corporation to begin the International Competitive Bidding process to encourage private participation. Reliance, NTPC, Tata Power, GVK Industries could bid to become a joint venture partner, the meeting heard.

Shahi asked PTC to ensure that the three states sign back-to-back power purchase agreements. He also said they should agree back-to-back escrow on revenue.

In case of default the project company should be allowed direct access to the consumers, Shahi said.

LNG Summit