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 its existing Bharuch plant.
The expansion has been held up due to unavailability of natural gas as fuel. Recently, the Central Electricity Authority appraised the project for domestic gas allotment, and it might get a fuel allocation in the 12th five year plan gas starting 2012. "As far as the readiness is concerned, we think we will one of the first few to get gas," said Naveen Munjal, Director Business Development, CLP Power India.
The combined cycle gas-fired plant in Gujarat, currently has a capacity of 655 megawatts. The company planned to expand it about five years back. However, the plan could not go through as domestic gas was not available. Buying imported natural gas was not viable. "The prices of liquified natural gas (LNG) are linked to crude oil prices. The tariffs currently prevailing 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 per unit.
Unlike many gas fuelled power projects under construction, the company does not plan to construct the project 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 headquartered CLP entered the Indian market in 2002. It currently has an installed capacity of 900 megawatts and around 1,600 megawatts under construction including those from 10 wind power projects. It also plans to invest in projects accounting to 10,000 megawatts 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 as case 2 power projects where government assures them of land, fuel and approvals, it is also looking at case 1 projects where no such assurances are available.
CLP is also looking to purchase projects from promoters who have been trying to sell the licences. "We are exploring opportunities to enter projects where some amount of development work like land acquisition, environmental approvals and fuel tie-ups have been arranged," said Munjal.
No comments:
Post a Comment