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Lack of demand for electricity may impact viability of the upcoming 2X300 MW Chandrapur thermal power station of Kolkata- headquartered CESC Ltd.
Located in Maharashtra, the Rs 2,800-crore project is scheduled for commissioning this year.
Nearing completion
“The plant may take a year to break-even,” CESC Chairman Sanjiv Goenka told newspersons after the company’s annual general meeting on Friday.
According to Goenka, while the first 300 MW unit of Chandrapur is nearing completion and will be commissioned shortly.
The company has so far been able to enter into only one power purchase agreement with the Tamil Nadu State electricity distribution utility for 100 MW daily supplies at Rs 4.91 a unit.
Running the plant at low capacity is not a viable option either, as larger parts of the fixed costs may remain unrealised from the 100-MW power sales to Tamil Nadu at a an agreed tariff.
Goenka does not deny that the uncertainties in electricity demand have put the viability of the Chandrapur in question in the short-term.
Stagnant sAles
Incidentally, while CESC is projecting a rise in peak demand in the city to 3000 MW over a period of five years, the company witnessed a one per cent drop in overall electricity demand in the April-June 2013 quarter.
Electricity sales have remained stagnant in the last fiscal.
The utility posted a five per cent growth in net profit of Rs 131 crore during the first quarter.
On Friday, the company’s stock closed 2.39 per cent lower at Rs 325.20 a share on the BSE.
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