Reliance Power's 2,400-MW Samalkot project will be India's largest gas-based power project after Dabhol, when it is fully commissioned in December 2012.
During a site visit arranged for journalists, Mr J.P. Chalasani, the chief executive officer of Reliance Power, said that the Samalkot project will be executed in a record time of 15 months. The open cycle (1,450 MW) – the first phase of the project, will be commissioned by March 2012.
However, securing gas supplies will be critical to the project commencing power generation. The management is currently counting on the KG basin gas to run its plants and is hopeful of getting the recommended 9.6 million cubic metre per day (mmscmd) of gas.
At 9.6 mmscmd of gas, the project will run at 75 per cent load factor (combined cycle). If the project gets lower gas than required, then the company will look at alternative strategies for the gas requirement. The prevailing tariffs in the southern States would also determine the fuel strategy according to the CEO.
In a scenario of lower availability of gas, the company may operate the station to meet the peak demand alone until the gas output improves. From a long-term perspective, it expects the gas output to rise beyond 2014. The second alternative is that the plants get base gas supply and this is pooled with expensive imported gas.
Location advantage
The strategy to set up this Rs 10,000-crore power project in the East Godavari district of Andhra Pradesh has two main benefits, the management said.
First, is its close proximity to the gas reserves of Krishna Godavari Basin (pit-head project) which reduces the transportation cost (if the gas supplies commence). Secondly, the high power deficits in the Southern Region and constraints in transmitting power from other parts of the country would mean higher tariffs.
A 2,400-MW plant that adds about 15 per cent power generation capacity to Andhra Pradesh's installed capacity, will help take advantage of this widening gap.
According to the CEA data, the energy deficit for the first nine months of this fiscal for the southern region was in excess of 7 per cent.
Bringing down fixed cost
Full financing for project has been sourced from the US Exim Bank at very low rates. According to the EXIM Bank Web site, the minimum interest rate for a 12-year loan (taken by Reliance Power for the project) is 2.43 per cent.
Mr Chalasani also said that the plant also occupies the smallest area per megawatt. Land use at Samalkot project stood at 0.04 acres/MW against 0.07 for Bawana 1,371-MW project and 0.19 for Torrent's Sugen project.
The compact nature of the plant also helped consume fewer steel pipes, water pipes and air pipes. This will reduce the auxiliary power consumption of the plant and make it more efficient.
Excess land can be used to set up another 800 MW of capacity.
Additionally, the company also managed to secure commitments from GE for maintenance of the plant for 17 years with strict penalties.