INDIA . Power plant inauguration

Further signs of the current success of the Indian economy were apparent in February when prime minister Atal Bihari Vajpayee inaugurated three power projects in Andhra Pradesh, Himachal Pradesh and Meghalaya constructed at a total cost of over Rs 50 000 million.

Inauguration of these projects,– National Thermal Power Corp’s Simhadri 1000 MW (2X500 MW) plant, developed at a cost of Rs 36 500 million in Visakhapatnam, National Hydro Power Corp’s Rs 16 840 million, 300 MW plant at Chamera in Himachal, and PowerGrid’s Rs 2638 million north-eastern load despatch centre in Shillong, also marks a general upturn in the area, which has had no significant road build and no electricity development in the fifty years since independence.

Mr Vajpayee emphasised that his government had undertaken a wide range of measures to develop the electricity sector and results were there to see. He added that recent budget measures by finance minister Jaswant Singh and the new electricity Act would attract much needed private and foreign investment into the sector.

Largest gas plant in the biggest state

This inauguration comes at time of rapid expansion in the Indian electricity industry, in terms both of its new project starts and of its ambition to keep pace with and adequately supply what is by some economic indicators the world’s second largest economy. In the northern state of Uttar Pradesh, India’s largest state with a population of 170 million, the country’s biggest private business conglomerate, the Reliance group, has announced plans to build the world’s largest gas-fired power plant. The project, a $2.2 billion 3500 MWe complex, would transform the state, almost doubling its power supply and eliminating a 2000 MWe power deficit in northern India.

The plant would be supplied by gas from fields discovered in the Bay of Bengal in 2002 by Reliance’s energy exploration subsidiary. Construction will be completed in phases of 1000-1500 MWe, with the first phase scheduled for completion in 2007.

Anil Ambani, managing director of Reliance, was reported as saying: “This represents 1.2 times India’s existing gas-fired power capacity, and would be the largest private investment ever – several times over – in the state of Uttar Pradesh.” the huge potential customer base is partly served by BSES, a Reliance subsidiary, which covers Delhi and Mumbai. Ambani is confident that power sector reforms will take off following reform of India’s power sector. The electricity act of 2003 gave independence from political interference to India’s state electricity boards. It also provided for trading of electricity and permitted private sector distributors to enter the market. Ambani said that the act had eased concerns among investors that they would not be able to recoup their investment.

Losses due to theft and inefficiency account for over a third of all electricity supply in Uttar Pradesh, and over 40 000 villages do not yet have electricity supplies. It has been estimated that the 2003 Electricity Act will lead to the construction of over 100 000 MWe of plant during the next 10 years. With the government’s focus on rural electrification, 175 000 small-scale power projects will be set up in the next seven years.

Meanwhile state-owned West Bengal Power Development Corp, which currently has 2900 MW installed capacity, plans to add 1120 MW by the year 2007 to meet the anticipated growth in power consumption in the state, in both the industrial and agricultural sectors.

Current peak demand is about 4000 MW and is estimated to go up by nearly 1500 MW in the next three years.To cope with growth in demand on such a scale the state government has entrusted WBPDCL with completing two new units of Bakreswar power project, the first phase of the coal fired Sagardighi project and the first unit of Santhaldih thermal power station. West Bengal chief minister Buddhadeb Bhattacharjee laid the foundation stone of the Sagardighi project in Murshidabad district on 8 February.

WBPDCL currently meets about 60 per cent of the state’s electricity load and exports power to other regions in the country through Power Trading Corporation.

Finance for the two Bakreswar units – estimated project cost Rs 15 billion – has been loan assisted by the Japan Bank for International Cooperation. The . The bidding process is underway and it is believed that two preferred bidders have been shortlisted. Statutory clearances for Santaldih are already in place and financial closure achieved with 80 % loan assistance from the Rural Electrification Corp. The Power Finance Corp has provided 70 % loan assistance for the first two Sagardighi units.