October 14, 2008

MP negotiating PPA with Reliance Energy and Essar Power

It is reported that Madhya Pradesh government is in talks Reliance Energy and Essar Power for power purchase agreements to augment power generation. The report said the companies will supply nearly 1,400 Mw. These companies will supply power after four years for 25 years.

Mr Sanjay Bandopadhyay energy secretary said “We are negotiating with Reliance and Essar and we expect to purchase power at as low as INR 2.40 to INR 2.45 per unit. We had floated tenders for purchasing 2,000 Mw. Lanco has committed to supply 600 MW at INR 2.34 per unit.”

He added that “Reliance has offered power at INR 2.70 per unit, while Essar has offered at INR 2.94 to INR 3.04 per unit. He also said we are purchasing 450 Mw at INR 9.50 per unit from Gujarat, which is costly.”

MP has already inked a deal with the Lanco group for purchasing 600 Mw. Lanco has issued a letter of intent to supply power at INR 2.34 per unit from its Orissa project.

Madhya Pradesh is facing a shortage of 1,100 MW when peak demand reaches 6,271 MW against the supply of 5,110 MW. Three units of the state, namely the Sanjay Gandhi Thermal Power station of 500 MW, the Amarkantak station of 210 MW and the Satpura thermal power station of 210 Mw went out of order due to technical problems.