East Coast Energy Private Ltd which is setting up a thermal power plant at Kakarapalli in Srikakulam district is planning to begin generation by March 2015, even though there has been a delay in executing the project, according to Krishna V. Tatineni, Managing Director. The project will have two units of 660 MWs each.

The project faced a lot of opposition from the local people and environmental activists on fears that environmental pollution would leave the area uninhabitable. The agitation against the project had led to delays in its execution.

He said in an interview on Thursday “the company is planning to accelerate the execution shortly. We want to commence generation by March 2015.” He said the company had allayed the apprehensions of the local public on the issue of pollution. “We are employing modern super critical technology which reduces greenhouse gas emissions by 6.5 per cent. In spite of the higher cost, we are adopting the technology. We have made arrangements for 100 per cent export of fly ash and the balance would be disposed through the advanced slurry disposal system. The project has received approval for clean development mechanism (CDM) from the National CDM Authority of the Ministry of Environment and Forests and we are the first independent power producer in South India to do so,” he said.

He said the company was also spending Rs 50 crore on corporate social responsibility projects as against the stipulated Rs 10 crore and it would make every effort to achieve the all-round, sustainable development of the area. He said the company had recently finalised a long-term power supply agreement with the AP Government for 300 MW at Rs 2.97 per unit during the first full year of operations and over the next 25 years in accordance with the PPA. “Power from this project would be one of the cheapest for coal-based power plants coming up in the State,” he added.

He said the current project cost was Rs 6,571 crore, with a debt/equity ratio of 3:1. The project may face a slight cost overrun due to the delay in the execution of the project but it would be within manageable limits.

Krishna said the sector was encountering huge problems related to fuel supply, land acquisition, financing, policy hurdles at the State and Central levels and environmental clearance. Another issue plaguing the sector but that was not being taken into account by the planners was the decommissioning of projects that have outlived their shelf life of 25-30 years. Though these projects continue to generate power even today, the issue is at what cost? It would be more cost-efficient to supply a scarce commodity like coal to a larger plant using super critical technology than supplying it to a power plant that runs on older technology. If the decommissioning of such old plants is taken into account, we will be short by 25-30 per cent of the current capacity generation in the India and we will stare at an even larger demand-supply gap and therefore there is no choice but to set up new thermal plants,” he argued.

sarma.rs@thehindu.co.in

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