The Hindu Business Line : TN clears cogeneration power projects

The Tamil Nadu Government has cleared a Rs 865 crore plan to set up over 185 MW of cogeneration power plants in the cooperative and public sector sugar mills.

The Tamil Nadu Electricity Board (TNEB) will establish the power plants jointly with the Sugar Department, which runs the 15 co-operative sugar mills and the two public sector mills in the State.

The mills will lease the land available with them to TNEB to implement the project. TNEB will raise a 13-year loan from the Rural Electrification Corporation Ltd covering about 80-90 per cent of the project cost. The members in the cooperatives will bring in 10 per cent and the balance would be in the form of equity from the Government.

The sugar mills will run the cogeneration facilities, which will power the mills and the surplus power will be exported to the State grid.

The TNEB would pay the sugar mills the power tariff at rates fixed by the TNERC after deducting the loan repayment due to the REC. The cogeneration plants would be transferred to the mills after the entire loan is paid off.

The TNEB and the Sugar Department will soon be coming out with tenders to execute the project. The State has passed an order to this effect last week.

Apart from augmenting the installed power capacity for the State, the cogeneration units represent additional source of revenue for the sugar mills. The TNEB pays Rs 3.15 a unit to buy the power from cogeneration units. On an average cogeneration units earn about Rs 50 lakh for every MW of power, annually.

According to official sources, this was in line with the State Government’s decision to set up ethanol plants and cogeneration facilities in the co-operative sector sugar mills. The objective is to add value and augment income to the mills.

TNEB’s involvement in the project, which is structured as build-lease-operate-transfer, will help the raise funds at competitive rates. The cooperative mills which are cash strapped do not have the financial capacity, they said.

The proposal to set up the distilleries for ethanol production is also on.

More Stories on : Power | Policy | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page