Essar Power Ltd, a subsidiary of Essar Energy Plc, has announced that the 600 megawatt (MW) unit 1 of its 1,200 MW Mahan I power project in Madhya Pradesh has commenced generating power.

This is Essar Power’s eighth operational power plant, taking its generation capacity to 3,910 MW.  This 600 MW capacity is the largest size single unit commissioned in Madhya Pradesh.

The Mahan I plant begins operations using a combination of imported coal and coal sourced from Coal India’s e-auction process, while an application has also been made for an interim tapering coal linkage allocation from Coal India. Coal from these sources will be required until Essar Power’s nearby Mahan coal block is operational. Essar Power received stage 1 forest clearance for the Mahan coal block at the end of October 2012.

Naresh Nayyar, CEO, Essar Energy, said, “We have now more than tripled our generation capacity over the past couple of years. Our focus now is on the development of the Mahan coal block which will provide a low-cost fuel source for the power plant, placing it among the lowest cost power generators in India.”

Unit 2 at Mahan I, also of 600MW, is expected to begin commercial operations during the first quarter of fiscal year 2013-14.

The Mahan I project represents a $1.2-billion investment by Essar Power. It is the company’s third coal-fired power project to enter commercial operations during 2012, with a total capacity of 2,310 MW. The Salaya I plant, also 1,200 MW, was completed in June 2012 while the 510 MW Vadinar P2 plant, completed in November 2012, is providing power for Essar Oil’s Vadinar refinery, where the availability of coal-fired generation is having a positive impact on refining margins.

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