New Delhi: In a new setback to an already controversial project, Ratnagiri Gas and Power Pvt. Ltd (RGPPL), formerly known as the Dabhol Power Co., has decided to scale down its capacity from 2,150MW to 1,844MW, a move that could increase the price at which the power set to be produced there will be sold to the state-run power utility in Maharashtra.
Production hurdles: An undated picture of the Dabhol power station near Mumbai. For the first time in India, a power plant that hasn’t been fully commissioned will see a scaling down of capacity. AFP
The tariff is currently Rs3.21 a unit. The decision to scale down, or derate, the capacity of the project stems from problems with equipment, said a senior Ratnagiri executive who didn’t want to be named. “When the machines cannot work at the nameplate capacity, you have to derate the project,” he explained. “We have decided to derate it to 1,844MW. The financial numbers are yet to be worked out.”
The derating process will require the approval of the Central electricity regulator as well as the other stakeholders in Ratnagiri. The project is divided into three phases, of which the second and third phases, with a capacity of 740MW each, are partially operational. The first phase, with a generation capacity of 670MW, is yet to be operational.
The project, originally promoted by Enron Corp., was taken over by a conglomerate that included public sector banks, Maharashtra government, state-owned GAIL (India) Ltd, NTPC Ltd and some financial institutions after the US power firm went belly up.
India’s power ministry had previously pointed the finger at equipment supplied by General Electric Co. (GE) as reason for its inability to revive the plant.
At an 8 August meeting of the committee of secretaries, a body of bureaucrats, India’s power secretary Anil Razdan had said, “In the assessment of RGPPL, the plant cannot be operated at the rated capacity of 2,150MW and it could be advisable to derate it appropriately.”
The recorded minutes, reviewed by Mint, also have Razdan saying: “GE machines of this type have reported problems not only in this plant, but also in similar machines abroad...in view of the general reputation of GE machines in the country, it is unlikely that they would find a major market here...”
“I have subsequently held a meeting with GE chief executive officer Jeffrey R. Immelt and his team,” Razdan said when asked to elaborate on his comments. “We have both agreed to get the maximum output by December this year. We are also working towards a maintenance contract with them. GE has some issues on the subject of the machines being improperly maintained.”
In an email, a spokesperson for GE said, “GE continues to support the Dabhol power plant revival project and we are committed to continue working closely with our customer to complete the revival of the plant as quickly as possible. GE, along with all stakeholders, has successfully increased the generation where the units can produce around 1,300MW.”
The derating of the Dabhol plant will be the first time in India that a power plant that hasn’t been fully commissioned will see a scaling down of capacity.
“The agreement has been signed by Mahavitran (Maharashtra State Electricity Distribution Co. Ltd) with (Ratnagiri) for 2,150MW. We will have to go through the process with them and if this derating is justified, it has to be approved by the Central Electricity Regulatory Commission. We are aware of this move on account of (Ratnagiri) having some problems with GE,” said Subrat Ratho, managing director, Maharashtra State Electricity Board Holding Co. Ltd, who holds additional charge as principal secretary, energy, Maharashtra.