Essar Group-owned Essar Power Limited informed that the first unit of 600 megawatt (Mw) of Salaya-1 project in Gujarat has commenced commercial operations, while the second unit of 600 Mw has been synchronised with the state transmission grid.
The project is scheduled to be fully commissioned during this financial year.
The second unit is expected to start commercial production in May, 2012.
The company is setting up two sub-critical units of 600 Mw at Salaya project with a total generation capacity of 1,200 Mw at an estimated investment of US $ 1.1 billion (approx. Rs 5,570 crore).
The company had signed a power purchase agreement (PPA) with Gujarat government utility, Gujarat Urja Vikas Nigam Limited (GUVNL) to supply 1,000 Mw of power at a price of Rs 2.40 per unit, one of the highest the company has received among its projects in other parts of the country.
Essar sources coal from Indonesian suppliers under a long term coal supply agreement.
"We are comfortable with international coal prices and confident to achieve nominal margins expected at the time of signing of PPA. We are also planning to start mining at our coal block in Indonesia over the next 9-12 months," said K V B Reddy, director, Essar Power Ltd.
The preliminary work has started at the company's Indonesian coal block, which has estimated coal reserves of about 17 million tonnes.
Besides Salaya-I, Essar Power is also implementing two more power projects, which will be commissioned in fiscal 2012. Mahan-1 project with the capacity of 1,200 Mw and the 510 Mw at Vadinar P2 project, the company informed in a statement issued on Wednesday.
Post commissioning of these projects, Essar Power's total capacity will rise from 1,600 Mw currently to 4,510 Mw by the end of this year.
