The 510MW P2 power project will consist of two coal fired units, Unit 1 and Unit 2 each with a capacity of 255MW.
Work is underway at Unit 2, which will also be synchronized with the transmission grid.
Essar Energy chief executive Naresh Nayyar said, "The synchronisation of unit 1 at Vadinar P2 is another step forward for our power business and when it is commercially operational, this project will also improve margins at the refinery."
Essar Oil’s refinery at Vadinar will purchase most of the power generated at the Vadinar P2 to improve margins at the oil refinery, following the relatively lower cost of coal-fired generation.
The remaining energy will be sold to Essar Steel and into the merchant market.
Essar Energy’s 1,200MW Salaya I project has also be commissioned while its 1,200MW Mahan I project will be synchronised shortly.
The three projects will increase Essar Energy’s total installed capacity to 4,510MW.
