The Hindu Business Line : Gujarat: Energising the nation with power, natural gas

A file picture of the Power Minister, Mr Sushil Kumar Shinde, with the Chairman of Coastal Gujarat Power Ltd, Mr Prasad R. Menon, after handing over of documents of CGPL (4000 MW Mundra Project) to Tata Power watched by the Chairman and Managing Director of PFC, Dr V.K.Garg (extreme right), in the Capital.

Virendra Pandit

Gujarat is one of the few states in India which supply power round-the-clock in most of its towns, cities and villages. Power situation in this industrialised state has been satisfactory and people in most towns and cities have not known load-shedding or power cuts for a long time, although due to rise in demand during harvesting season, power supply is sometimes rationed in rural areas. Electricity reforms and strict observance of law have reduced transmission losses and theft to the minimum. Gujarat Electricity Board (GEB), which had accumulated losses of more than Rs. 2,500 crore over the past few years, turnaround in the wake of these reforms and registered a net profit of Rs. 200 crore last year.

Gujarat has also become the first state in India where electricity has reached all the 18,065 villages, in the far flung areas, which now have access to three-phase uninterrupted electricity supply round the clock.

The State Government commissioned a network of 56,599 km long cables and 12,621 new transformers under its ambitious Jyoti GramYojana in a record time of 30 months with an investment of about Rs.1,500 crore for this purpose.

Installed capacity

Currently, Gujarat’s installed capacity of power production is 9,700 MW. Further, an additional 4,200 MW is available from captive power plants. The demand for power is projected to be 14,031 mw in 2011-12.

A number of coal-based thermal power plants are coming up that would contribute more than 6,000 mw in the next few years. The State is also awaiting Central nod for gas-based power plants. Gujarat has also firmed up plans to add a capacity of another 11,000 MW of power generation in the state at an estimated investment of Rs.4,500 crore in the next five years.

The power generation capacity is targeted to go up to 20,725 MW by the end of 2011-12. The MoUs signed during recent Investors’ Summit will generate 8,200 MW with private sector investment. In addition, there will be a nuclear power plant with a generation capacity of 7,400 MW.

One of the 10-odd ultra mega power projects (UMPP) in India is coming up with an investment of Rs 20,000 crore at Mundra in Kutch district. Tata Power Company, which is constructing the 4,000-MW power plant on 2,700 acres of arid land, in public-private partnership, would provide power at the low rate of Rs.2.26 per unit.

super-critical units

The project, based on imported coal, comprises five super-critical units of 800 MW each and is likely to be completed in the 11th Five-Year Plan, by 2012. This would supply electricity to Gujarat (1,900 MW), Maharashtra (800 MW) and Punjab (500 MW), besides Haryana and Rajasthan (400 MW each).

Another major power plant is also coming up just about 10 km from the Tata’s. This 2,640 MW thermal power plant, also based on imported coal, is being developed by the Adani Group which is investing nearly Rs.10,000 crore in the vicinity of the Mundra Port and SEZ it is developing.

The Adanis are also working on another coal-based plant of 1,320 MW. The Torrent Group would construct a 1,000 MW plant near Surat. Besides, Gujarat Electricity Board (GEB) would also add 115 MW during the 11th Plan (2007-12).

Besides, the Union Power Ministry is scouting for a location to set up either a mega or ultra mega power project somewhere in the western part of the country preferably in the vicinity of port areas of Gujarat.

The power generation capacity of the proposed project would either be 2000 MW or 4000 MW, depending upon the port capacity and infrastructure facilities available at the location.

The project, which will supply power to more than one State, would have an investment of around Rs. 20,000 crore.

It will be the second ultra power project in the State, the first being the one under development by the Tata Group at Mundra in Kutch.

The Sanghi Group is also setting up a 1,200 MW power project with an investment of Rs.1,800 crore in the same district.

In another major initiative, seven PSUs viz. Gujarat Power Corporation, Gujarat State Investment Ltd., Gujarat Mineral Development Corporation, Gujarat Industrial Power Co., Gujarat State Fertilizers Company Ltd, Gujarat Narmada Valley Fertilizers and Gujarat Alkalies & Chemicals are forming a joint venture company, known as Bhavnagar Energy Company, for setting up a large lignite-based single power project with a capacity of 480 MW and having investment of Rs. 2,300 crore at Ghogha in Bhavnagar district.

The agreement for the power project was signed on July 25, 2007.

This new company will be set up with an initial capital of Rs.625 crore. The wind energy sector has also attracted investors with massive investments. The installed capacity through wind farming in Gujarat grew fourfold to 455 MW during the last five years. It is likely to cross 600 MW by October 2007.

Wind farm policy

To further encourage this activity, the State Government recently announced New Wind Farm Policy making it more attractive for private investors.

The companies entering this sector can now sell power to any entity and earn higher prices.

Earlier, manufacturing units were allowed to generate power for captive consumption and the surplus power could only be sold to the Gujarat Electricity Board. The State Government has also revised the tariffs, from Rs. 2.60 per unit to Rs. 3.37 per unit.

In addition, investors have been exempted from the payment of electricity duty.

Now, Gujarat is preparing to come out with a Solar Power Policy covering various incentives to attract investors in this sector also.

The plan is to go for solar cities, solar offices, etc. The incentives will cover benefits of solar energy in terms of prices on long-term basis. The concept of increase in power generation through non-conventional resources will also help for environment conservation.

Oil & Natural Gas

A view of the Petronet LNG project site at Dahej, Gujarat.

Gujarat has been one of the earliest oil and natural gas producing States in India, with reserves located at Ankleshwar, Mehsana, Tapti High (India’s second largest gas producer), Hazira, Bharuch, Gandhar, Dahej, Jambusar, Palej, Kalol and Ahmedabad.

This State is also the only Indian state with more than one gas producer. Thus, apart from ONGC, Gujarat State Petroleum Corporation (GSPC), Cairn Energy and Nico Resources are also involved in the process of production of natural gas in Gujarat.

Some private players like the British Gas and the Adani Group, besides public sector companies like GAIL, BPCL and GSPC, are in the gas distribution business.

Besides, Hazira and Dahej have the only LNG terminals in India. Similar terminals are proposed to be set up at Mundra and Pipavav.

Gas transmission

Gujarat also has an extensive gas transmission network. A gas grid of some 2,200 km length is being developed for urban gas distribution system with nearly a quarter of it already under operation.

The state-owned Gujarat State Petroleum Corporation (GSPC) has recently struck huge oil reserves estimated at about seven million barrels recoverable from the first well of Miroli in Olpad and Cambay fields in Central Gujarat.

The oil was found at a depth of 2,479 metres onshore in Miroli. This discovery was made with partners like Jubilant, Geo Global Resources and Prize Petroleum under the first phase of oil exploration in this region. Oil extraction is likely to start soon.

In 2005, GSPC had struck a huge gas reserve in K-G Basin off the coast of Andhra Pradesh. Earlier GSPC had also struck both oil and gas in Dholka region of Ahmedabad district.

Gujarat also has three underground coal gasification (UCG) projects under implementation and one more is on the cards.

The State is all set to emerge as the hub of underground coal gasification in the country, marching ahead of other States in its quest for producing gas through this process.

The first pilot UCG project is expected to come up in 2008 at Mangrol in Surat. Another project, being developed by Gujarat Mineral Development Corporation (GMDC) and ONGC, is at an advanced stage, with the hydrological study pending. Its pilot project is expected to start next year in Bhavnagar district. Besides, the Reliance Group has also tied up with GMDC to start a similar project at Valia in Bharuch District.

A UCG project is under consideration by the Neyveli Lignite Corporation and ONGC, for which, both the companies are in the process of identification of location in Gujarat.