The Hindu Business Line : Reliance Hirma unit to go commercial next year

RELIANCE Power Ltd's 3,960-MW project at Hirma in Orissa will begin selling power by March 2008, according to a review of energy markets by Reliance Industries Ltd.

The report prepared by RIL's Energy Research Group said the first unit of the country's largest coal-fired power plant was likely to begin commercial production by December 2006.

This is perhaps the first time that the company has given a timeframe for completion of the project after its multinational partner Mirant Asia Pacific Ltd withdrew in January 2002 citing delays and uncertainties in the Indian electricity market.

While the Union Government is likely to shortly approve the project's payment security mechanism, a power purchase agreement is under negotiation.

Power Grid Corporation of India Ltd will lay the transmission network to evacuate power from the project. The Central Electricity Authority is currently reviewing the proposed transmission scheme.

Hirma would offer rates approved by the Central Electricity Regulatory Commission (CERC) in its September 2000 tariff order. While fixed charge over 30 years would be Rs 1.40 per kilowatt-hour at constant prices, at current prices the company would charge Rs 2.13 per kilowatt-hour at 85 per cent plant availability and use of super-critical boilers, the report said.

The CERC had in 2001 declined a request from Mirant and Reliance Power to increase the tariff for electricity to be sold by the project.

The project, when it comes up, is expected to supply 1,200 MW to Rajasthan, 960 MW power to Punjab, 500 MW to Haryana, 700 MW to Gujarat and 600 MW to Madhya Pradesh.

A development agreement, which outlines a schedule for completion of the project's power purchase agreement, fuel supply agreement, implementation agreement, payment supply mechanism, etc., had been signed, the report said.