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The electricity generation sector, which relies on coal, must prepare to operate in an open-market scenario with adequate technical flexibility to meet peaking power demand in view of the rise in renewable energy generation, feels Raghav Raj Kanoria, MD of Kolkata-based India Power Corporation Ltd.
India Power has a 300 MWpower plant, Meenakshi Energy, in Nellore in Andhra Pradesh, which uses imported coal. The total generation capacity would rise to 600 MW when two units – 150 MW each – become operational at Haldia in West Bengal (Haldia Power). If that’s not all, the capacity of Nellore plant would be raised to 700MW in a year’s time.
But India Power does not have a single power purchase agreement (PPA) in place. The last one of 200 MW for Meenakshi Energy expired in June this year. The West Bengal government cancelled the 300 MW PPA at Haldia to rely on open-market purchases. The company also has power distribution rights at Asansol in West Bengal and Gaya in Bihar, but the sourcing arrangement has no synergy with the generation business, which solely depends on open-market demand.
“We will surely look into grabbing PPA opportunities, if any. But States are not showing any urgency to enter long-term contracts,” Raghav (27), son of SREI Group Chairman, Hemant Kanoria, told BusinessLine . That surely makes the going tough for India Power. Barring the last three months, when open-market power demand peaked, Meenakshi operated at 40 per cent PLF (Plant-load factor). But Raghav is unfazed.
“While the demand situation would improve with time, the demand dynamics will be more complex in view of the increasing arrival of solar power. This means coal-based plants should have the technical ability to step up quickly and tap the peak demand window,” he said.
Power distributionIndia Power is focussing on enhancing its stake in the power distribution business. The distribution franchise in Gaya was successful in reducing AT&C losses from as high as 80 per cent to 40 per cent in the last three years.
“We are targeting to bring the distribution losses to 25 per cent in the next one year,” he said. The company is evaluating the possibilities of participating in distribution franchises offered by Odisha. “We are eyeing more distribution contracts,” said Raghav.
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