Reliance Power, which is concerned about cost of import of coal from Indonesia, said its imported, coal-based, 3,960-MW Krishnapatnam Ultra Mega Power Project will generate over Rs 1,100 crore worth carbon credits in the initial 10-year period.

A new law enacted by the Indonesian Government does not allow exporting companies to sell coal below notified rates (market prices) after September 23 and nullifies all arrangements on prices made by companies. Earlier, there were no regulations on coal pricing.

Reliance Power said the project has been registered with Clean Development Mechanism Executive Board of United Nations Framework Convention on Climate Change. The registration allows the Reliance Power project to earn certified emission reductions (CERs), each equivalent to one tonne of CO2.

The registration has drawn flak from environmentalists who criticised the UN for the award of the eligibility to earn carbon credits to the power producer. The green organisations said the project was viable without the eligibility to earn the carbon credits.

Reliance Power's 3,960-MW Sasan ultra mega power project was the first such project to be registered with the UN framework for carbon credits earlier this year.

The company said that with the registration of Krishnapatnam project, Reliance Power had become the largest supplier of CERs among the Indian power generation companies — with 3.48 million CERs.

Reliance Power will generate approximately 34.8 million CERs during the initial 10 years of operation with the expected incremental revenue from the sale of CERs to be over Rs 3,100 crore.

The Krishnapatnam project, being built at Rs 17, 400 crore in Andhra Pradesh, is a 6X660-MW supercritical technology-based plant. The company has entered into a 25-year power purchase agreement with four States for the entire capacity at Rs 2.33 a kWh.

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