Firms vie for gas-based power projects in state
December 28th, 2010

A battery of global and Indian conglomerates have evinced interest in building three gas-based power stations in Karnataka with a cumulative capacity of 2,100 Mw, at Davanagere, Belgaum and Gadag. According to information available, global companies including GE, AES and Marubeni Corporation are among the ones that have shown interest in setting up these generating stations. Competing with these giants will be Indian corporations, including the Tata Group, Jindals, Reliance Power, L&T, Adani among others.

According to senior government officials in the Karnataka government, nearly 52 companies have shown interest in these projects being planned along the rote of the proposed Dabhol-Bidadi gas pipeline to be set up by the Gas Authority of India Limited. Government officials indicate that the projects will be allocated through the bid route.

In addition to these large projects, close to 90 private players have shown interest in taking up gas-based merchant power plants with capacities ranging from 50 Mw to 300 Mw. The state government is offering 900 Mw to private sector for setting up merchant power plants and all these projects cumulatively would require an investment of around Rs 12,000 crore. Industry analysts detail that gas-based power project cost little over half of what coal-based power project requires.

These steps to increase power generation in the state are part of the state’s long term agenda to plug the 26.5 per cent peak demand-supply gap. In addition to initiating a string of pacts with the public and private players to step up generating capacity in state, Karnataka has also requested the Centre to an increase of 1,000 Mw in its share from central generating stations from the present allocation of 1,534 Mw.

Karnataka has a total installed capacity of 9,559 Mw and the average availability is about 5,953 Mw. The average daily consumption is 115 MU and the energy shortage is 13.7 per cent.

“While the load growth is about 9-10 per cent annually, consumer growth is 6 per cent, while distribution losses is at 20.6 per cent, the transmission loss is 4.31 per cent,” the official detailed. As a result of these, the electricity supply companies are in severe financial crunch and the capital expenditure programmes for 2009-10 is near the Rs 3,000 crore mark.

Source – Business standard

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