Essar Power Plans To Start Hazira Gas-Based Plant In 3 Months

Mumbai: Almost three years after it was shut for want of fuel, private utility Essar Power is planning to start operations at its 500 MW natural gas-based power plant at Hazira in Gujarat in the next quarter, a top company official said.

The Bhander Power-Hazira plant was commissioned in 2006 and commenced full commercial operations in October 2008, but due to high price of the fuel, the company had kept the operations suspended since the past three years.

It is a natural gas-fired combined-cycle captive power plant.

"We had shut operations at two of our gas-based plants with a capacity of 500 mw and 515 mw each at Hazira due to non-availability of the fuel."

What was available was so expensive, almost at $12-14 per mmbtu, that we could not even dream of generating power so we had to shut operations," executive vice-chairman Sushil Maroo told PTI here.

However, since the prices are now falling, the company will commence operations at least at the Bhander plant in the next quarter, he said.

"The prices have gone down to almost $4.5-5 per mmbtu. Though we expect it to further come down to a comfortable level, at this rate also we can at least start instead of keeping the plant idle," Mr Maroo said.

He said the idea is to operate it at an optimal capacity and the company will sell the power to Essar Steel, which is responsible for providing the natural gas required for the plant.

Mr Maroo further said the company has also kept the 515 MW Essar Power-Hazira power plant on ready mode but will operationalise it only if gas prices go down further.

The Essar Power-Hazira is a multi-fuel (naphtha, high-speed diesel, natural gasoline liquid and/or natural gas) combined-cycle power plant.

The company has signed PPAs with Essar Steel and Gujarat Urja Vikas Nigam Limited (GUVNL) to buy power from the plant commissioned in October 1997.

He, however, said that even if they procure gas at lower rates, the next problem faced by the company is LNG regasification.

"We do not have adequate regasification facility in the country. So even if I get gas, I am stuck with the LNG regasification. We are trying to find out a solution for that and we think the regasification capacity should go up as gas is another good source of energy," Mr Maroo added.