×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Ourview | Mega power makeover

Ourview | Mega power makeover
Comment E-mail Print Share
First Published: Tue, Aug 30 2011. 10 08 PM IST

Jayachandran/Mint
Jayachandran/Mint
Updated: Tue, Aug 30 2011. 10 08 PM IST
It is not often that the Tata group and Anil Ambani’s Reliance Group escalate market battles to the courts, even indirectly. A beginning was made a few years ago when Tata Power questioned the government’s wisdom in awarding a captive mine-based project to Anil Ambani-controlled Reliance Power Ltd. Their contention: excess coal from the mines in the Madhya Pradesh-based Sasan project is being used by Reliance Power to fuel another project. Tatas lost the case in high court and have now filed an appeal before the Supreme Court.
Jayachandran/Mint
If not anything else, this demonstrates two things: first, the ruthless fight for cheap fuel, something that drives a profitable power generation business like nothing else. This is especially true in these times of high commodity prices, be it gold, coal or crude oil. Secondly, the controversial manner in which the project was tendered by Power Finance Corp. Ltd (PFC), the government-appointed nodal agency for awarding “ultra mega” power projects.
PFC’s ability to bid out projects has improved since then, having awarded three more projects without much fuss. However, controversies and issues continue mainly on account of inflamed commodity prices globally. This is relevant as two of the three projects, one at Krishnapatnam in Andhra Pradesh and another at Mundra in Gujarat, are based on imported coal. Ironically, this worry brings together the very two parties that have indirectly locked horns in the Sasan project. They are seeking help from the government as their aggressive tariff bids are unviable now due to unprecedented surges in coal prices.
Against this backdrop, PFC is planning to bid out a 4,000MW imported coal-based project in Tamil Nadu. This is a bad idea. PFC has failed to keep up with the changing markets. An imported coal-based project is an invitation for expensive electricity. There are cheaper options worth exploring: hydel and nuclear power.
The hydel potential of the north-eastern region of the country is vast and lies virtually untapped. PFC or another dedicated organization must “ripen” these projects for investors to loosen their purse strings. This will not be easy. Resettlement and rehabilitation issues are a challenging lot. Besides, hauling electrons to consumption centres will involve setting up large transmission highway corridors.
The lessons from the fuel market need to be kept in mind when inviting nuclear power. It only gets a bit more complex—it’s not enough to have a fix on the cost of uranium alone, but also on the processing costs over the 60-year life of a nuclear plant.
Does India need to plan its power options better? Tell us at views@livemint.com
Comment E-mail Print Share
First Published: Tue, Aug 30 2011. 10 08 PM IST