India-based multinational company Essar Energy is planning to convert two of its gas-fired units into coal based plants in the state of Gujarat.
The company is considering the decision following reduced production of natural gas at domestic level and the high prices of import.
Essar is planning to convert its 515MW Hazira power plant located in Hazira, Gujarat. It is a multi-fuel plant that can use naphtha,
high-speed diesel, natural gasoline liquid and natural gas to generate electricity.
The company will also change its 500MW Bhander Power-Hazira plant located in Hazira, Gujarat. It is a natural gas-fired combined-cycle captive power plant.
Essar Energy CEO Naresh Nayyar was quoted by The Economic Times as saying, "These plants were commissioned on APM gas, but as there is no availability of either APM gas or allocation from KG-D6, we have been using costly LNG at an average rate of $12-18 for the past 2-3 years, which is becoming uneconomical. So, we will be switching to coal."
Full conversion of the plant into coal based plant is expected to take three years.
Essar Power executive director KVB Reddy said, "We will be sourcing about 1.5-1.7 mtpa coal from Indonesia. This will result in a cost reduction of 50% as it costs around 9 cents to produce 1 kwh of power with LNG and 4 cents through coal."