China Light and Power (CLP) India has finally got the technical approval from the Central Electricity Authority for its 1,200-Mw gas-based power plant in Gujarat.
The project that is expected to cost Rs 6,000 crore involves expansion of CLP's existing Bharuch plant. The project had been held up due to unavailability of natural gas. Recently, the Central Electricity Authority appraised the project for domestic gas allotment, and it might get fuel allocation in the 12th Five Year Plan, starting 2012."As far as the readiness is concerned, we think we will be one of the first few to get gas," said Naveen Munjal, director, Business Development, CLP Power India.
The combined cycle gas plant has a capacity to generate 655 Mw. The company planned to expand it about five years back, but unavailability of domestic gas had stalled the plan. Buying imported natural gas was not viable. "The prices of liquefied natural gas (LNG) are linked to crude oil prices. The tariffs in the Indian power sector cannot sustain usage of only LNG as a fuel," said Munjal.
Currently, the spot prices are at approximately $15 a million British thermal unit, and going by this, the variable cost itself will be close to Rs 4.50 a unit. With fixed charges and transmission charges, the total cost per unit will be well over Rs 6.
Unlike many gas-fuelled power projects under construction, the company does not plan to construct the plant before a committed fuel allocation. "There is no point in building a project and not using it to generate power. It won’t even receive the shareholders and lenders’ approval," said Munjal.
CLP has already acquired land and environmental approval for the project. Hong Kong-based CLP entered India in 2002. It has an installed capacity of 900 Mw and around 1,600 Mw under construction, including those from 10 wind power projects. It also plans to invest in projects of 10,000 Mw by 2015.
The company plans to achieve this feat by bidding for and winning ultra mega power projects (UMPPs), two of which might seek bids this year. Even as the company plans to look mainly at Case-II power projects where the government assures them land, fuel and approvals, it is also looking at Case-I projects where no such assurances are available.
CLP is also looking to purchase projects from promoters. "We are exploring opportunities to enter projects where some amount of development work such as land acquisition, environmental approvals and fuel tie-ups has been arranged," said Munjal.
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