Tata Power to sell pithead power across state borders

Vol 8, PW 18 (01 Dec 04) People & Policy

New electricity legislation that allows generation companies to transmit and sell electricity across state borders was critical in persuading Tata Power to set up pithead power plants in two of Indias most backward states: Jharkhand and Orissa.

Tata Power plans to export much of the electricity from its new power plants in these two states to wealthier regions of India such as Delhi, Rajasthan, Punjab, Himachal Pradesh, West Bengal, Andhra Pradesh, Maharashtra, Gujarat and Karnataka. Last year, Tata Power set up a subsidiary called Tata Power Trading Corporation, on the lines of the Power Trading Corporation, aimed at facilitating the transmission of power across state borders.

We plan to exploit Tata Steels expertise in coal mining and ensure synergy of strengths of the two companies. Tata blames the following for its decision to move to coal: Non-availability of gas and extreme dependence on imports Gas prices (with a floor and cap index) linked to crude oil Transactions denominated in foreign exchange Growing cartelisation of worldwide gas producers similar to OPECTata Power agrees that natural gas is environmentally friendlier than conventional Indian coal with its high ash content of 30% to 35%.

But it argues the cost at which power can be produced by gas is very steep and will put us out of business. What measures will the company take to fight pollution, the biggest problem in coal-based power plants We learn Tata Power plans to make innovative use of the ash disposed.

First, all the power plants will be located near the coal block - the source of the fuel - and away from urban establishments. Emission norms will be met with a practical implementation of anti-pollution norms, adds the company.

The ash left behind during generation will be dumped back into the coal mine for back-filling to avoid any environmental imbalance.

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