Date:05/05/2006 URL: http://www.thehindubusinessline.com/2006/05/05/stories/2006050504680100.htm

Back Captive power units spell money for big corporates

Anil Sasi

Maruti, SAIL, Tata Steel, RIL among firms selling surplus to the grid

Meeting needs
The country's captive power generation capacity is estimated at upwards of 20,000 MW on a cumulative basis.
Of this, the Government estimates that around 5,000 MW to 7,000 MW power can be tapped and evacuated to the grid to meet short-term and peaking shortages.

Anil Sasi

New Delhi , May 4

The grim power availability situation has opened up a revenue source for big corporates. Maruti Udyog Ltd, SAIL, Hindustan Zinc, Gujarat Ambuja, Essar Steel, Tata Steel and Reliance Industries Ltd are among the bevy of companies that have begun selling surplus power from their captive power units, and, in most instances, at competitive rates.

Following the enactment of Electricity Act 2003, the Government has shown renewed interest in tapping captive generation to meet the demand-supply gap and India Inc, cutting across manufacturing sectors, has started selling surplus electricity, mostly to power-starved State Electricity Boards.

The figures

According to Government data, Essar Steel has begun selling around 35 MW of surplus power to the grid from its 132 MW LNG-based captive station in Gujarat at around Rs 3 per unit. Indo Gulf Fertilisers is selling about 18 MW of power from its 36 MW captive station in Jagdishpur at Rs 2.80 per unit.

Reliance Industries is planning to sell around 19 MW of power from its Maharashtra facility to the grid at around Rs 4.50 per unit while the company has firmed up plans to supply 30 MW of power from its 44-MW gas-based captive station in Narora.

Maruti Udyog - the country's largest carmaker - is in the process of working out the tariffs for around 20 MW of power that it plans to sell from its 60 MW LNG-based station attached to its Gurgaon factory.

PSUs too

Not to be left behind, State-owned firms are also capitalising on the opportunity at hand. The state-owned National Fertilizers Ltd is selling 17 MW to the grid from its captive station in Madhya Pradesh while Steel Authority of India Ltd is planning to sell around 20 MW of power on an average from its 772.5 MW captive unit in West Bengal.

Indo Gulf Fertilisers' unit at Jagdishpur in Uttar Pradesh, Tata Chemical Ltd's Gujarat unit, Rashtriya Ispat Nigam Ltd's Andhra Pradesh unit and Madras Cements Ltd and Sakthi Sugars' Tamil Nadu units are among those selling above 20 MW to the grid.

Scaling up capacity

Encouraged by the opportunities, firms are also scaling up their captive stations. Grasim Industries' White Cement Division, which currently has its 3.1 MW captive station in Rajasthan connected to the grid, is planning to add another plant. Prakash Industries is planning to add 125 MW to its existing 77.5 MW stations over the next three years. Aluminium major BALCO, which is selling around 30 MW from its 270-MW captive station in Chhattisgarh, is adding a 540-MW new captive station at the same location.

The country's captive power generation capacity, set up by industry to meet its own power requirements in light of inadequate and irregular supply from SEBs, is estimated at upwards of 20,000 MW on a cumulative basis. Of this, the Government estimates that around 5,000 MW to 7,000 MW power can be tapped and evacuated to the grid to meet short-term and peaking shortages.