Business Standard

Bhoruka to enter gas-based power sector

Image

BS Reporter Chennai/ Bangalore

Bangalore-based Bhoruka Power Corporation Limited (BPCL), an independent power producer with a major focus on mini hydel and wind energy, is making a foray into the gas-based power segment with its maiden project in north Karnataka.

The company is planning to set up a 300-Mw gas-based power plant at Chikkodi in

Belgaum district at an investment of Rs 1,200 crore. It would be sourcing gas from the Dabhol-Bidadi gas pipeline being laid by Gas Authority of India Limited (GAIL).

“We have identified land at Chikkodi and entered into a consent agreement with farmers for buying land. We would be buying 100 acres for our plant. The land will be acquired after the gas price is fixed by GAIL,” S Chandrasekhar, managing director, BPCL, told Business Standard.

 

This would be the first gas-based power project being developed by the company. The company generates 112 Mw of power from 15 mini hydro stations and three wind power plants. Of this, 100 Mw is from hydel stations and 12 Mw from wind mills. It will commission another 26 Mw wind power plant at Gadag by the end of the present fiscal.

“Bhoruka Power was one of the 20 companies that came forward to build gas-based power projects along the GAIL gas pipeline. We will sell our power in the open market on a merchant-basis,” Chandrasekhar said.

GAIL (India) Ltd is building the first gas pipeline project in Karnataka at an estimated cost of Rs 5,000 crore. The pipeline will come from Dabhol in Maharashtra and terminate at Bidadi near Bangalore. The construction work will start in December 2010 and the pipeline will be ready by March 2012. The commissioning would take another couple of months and the gas supplies are expected to begin by June 2012.

Chandrasekhar said the company was waiting for the state government to negotiate with GAIL for fixing the gas prices. GAIL has announced $14-15 per million metric British thermal units (mmbtu) and at this rate, it would not be economical for power companies to generate power and sell it. “We are asking both Centre and state governments to intervene and fix the gas price at $10-11 per mmbtu. We have asked the state government to work out the subsidy component to encourage power producers,” he said.

He said, at the present rates, it worked out to Rs 7 per KwH of power and unless it was cut to Rs 5 per KwH, it would not be feasible for power producers.

The Karnataka government is in the process of setting up a task force on power jointly with the Confederation of Indian Industry (CII) to work out an incentive scheme for gas-based power producers. “Once the taskforce makes its recommendations it would be easy for the producers to start work on building the power plants,” he added.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Nov 08 2010 | 12:15 AM IST

Explore News