Karnataka to invite bids for four gas-fired power plants of 700 MW each

Karnataka government plans to set up four gas-fired power plants of 700 MW each in the state and expected to invite tariff-based bidding from private investors soon after it signs long-term gas supply contract, state government officials said.

“We have invited suppliers in our global investors summit being held in June and expect to tie up for fuel then,” principal secretary DN Narasimha Raju said on the sidelines of the 7th Asia Gas Partnership Summit, organised by Gail and Ficci.
State-run Gail is keen to sign gas supply contract with Karnataka government as it has required infrastructure, a company official said. “We are in talks with the state government. Our 1140 km Kochi-Kottanad-Banglore-Manglore pipeline is 84% complete and it will be ready by Aug 2012,” the official said.

Power Company of Karnataka’s managing director M Naveen Kumar said the proposed plants would be set up in Belgaum, Gadag, Davangere and Tumkur under tariff-based competitive bidding routes.

“Project will be awarded to investors who would offer lowest power rates. But we can’t invite bids unless we know price of the fuel, which is a must for tariff-based bidding,” he said.

Kumar said the ideal price for gas sould be around $8 per mBtu for developing these projects.

Karnataka government has already contracted for offtaking gas from the Dabhol-Bangalore pipeline for 700 MW plant at Bidadi, which would be imported in the form of liquefied natural gas at the Dabhol terminal.

Kumar said “it is surprising that LNG is cheaper in the spot market than entering into a long-term contract these days. That is why the (Karnataka) cabinet had approved sourcing LNG from the spot market.”

Karnataka is managing power supply in state by buying 450 MW peak power from Tata Power, PTC India and National Energy Trading & Services. “There is no load-shedding in the state because we are buying power by paying Rs 5.20 per unit from reputed companies,” Kumar said. The state has a peak demand of 8,100 MW.

He said, the state has contracted 300 MW from Tata Power, 100 MW from PTC and another 50 MW from National Energy Trading.

“Out of 450 MW, we are able to draw only 42% of the contracted quantity due to severe shortage in grid capacity in the southern region,” he said. The company has also contracted electricity from Gujarat state-owned power generation company Gujarat Urja Vikas Nigam at Rs 4.26 per unit till Jun 2013.
Source: ET

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