UP gives nod to power plant expansion plan

The Uttar Pradesh government has deferred plans for setting up the 330 Mw gas-based thermal power plant at the existing coal-based Panki thermal plant, while expansion plans for setting up 500 Mw units, at Harduaganj and Parichha, have been approved.

The plant and machinery for the two new thermal units will be sourced from Bhel at negotiated prices.

The contract for civil works at the two plants is likely to be entrusted to a state agency and the orders for the supply of equipment like boiler, turbine and generator motors are likely to be placed with Bhel in next three months.

Work is likely to commence within this year and the expansion project is targeted to be completed by 2008-09.

The gas-based plant at Panki has been deferred for the inability expressed by GAIL India to supply gas from its existing HBJ pipeline in UP. The import of gas was found to be an unviable option.

Sources said the landed cost of the gas comes to Rs 6 per MMBTU, which does not include the handling, transport charges and the local taxes. This price of the gas is based on the present price of the crude oil at $50.

The prohibitive cost of the power generated at over Rs 4.20 per unit prompted the government to defer the Panki plant till the availability of the gas at affordable price.

The Cabinet, in December last, had adopted a proposal for expansion of three existing plants where two 250 Mw coal-based thermal units were to be set up at Harduaganj, two 250 Mw units at Harduaganj, two 110 Mw combo cycle units gas based units at Panki, thus adding 1,330 Mw of additional capacity in next three years with an estimated investment of over Rs 5,000 crore.

The Cabinet had set up a committee to examine various routes for the execution of the expansion plan for Harduaganj and Parichha. The committee looked at several options for the early commissioning of the new units.

The first option was to award the project to Bhel on turnkey basis, second was to invite international competitive bidding (ICB), and the third option was to divide the work between Bhel and other central and state PSUs.

The committee recommended that Bhel was a trusted supplier of equipment to the UP Power Generation Corporation and the plant and machinery for 1000-Mw units be purchased from the PSU, at negotiated prices.

Power Finance Corporation of India had agreed in principle to fund the expansion project of the Pariccha and Harduaganj thermal power stations. The PFC has communicated its consent to the UP Thermal Power generation corporation to fund the expansion project to the tune of Rs 2,660 crore. Rest of the cost would be met from the budgetary support by the UP government.

The PFC would fund nearly 70 per cent of the project cost an d the rest would be provided by the state government through the budgetary support' said Ashok Khurana, Principal Secretary energy .The borrowing from the PFC would be against the borrowing of the assets of the power generation utility.

Construction of new units at the site of existing plants has become imperative for the government grappling with the power crisis for over a decade. The new units will incur no cost on land and infrastructure like coal washery, coal handling plant, ash plant, compressed air and water plant, air conditioning system and the township, which are already available.

Moreover, the existing units have, long outlived their lifespan and would have closed down in next few years.

At Paricha, two existing units of 110 Mw each were over 21 year old and were operating at derated capacity. Seven existing units at Harduaganj of capacity ranging between 50 Mw to 110 Mw were over three decade old and only three were operating and four were closed. At Panki two units of 32 Mw each were closed for over a decade while two units of 110 Mw capacity each were 30 year old and operating at derated capacity.