NTPC, Bhel shelve joint move to build less polluting plants

NTPC, Bhel shelve joint move to build less polluting plants

New Delhi / Hyderabad: Differences over intellectual property rights (IPR) have caused NTPC Ltd and Bharat Heavy Electricals Ltd (Bhel) to scrap a proposed joint initiative to build power plants that use the integrated gasification combined cycle (IGCC) technology.

IGCC is a technology that turns coal into gas and removes impurities from the coal gas before it is combusted, resulting in lower emissions of sulfur dioxide, particulates and mercury.

NTPC has decided to go ahead on its own and will shortly be appointing a consultant to prepare specifications for these plants, according to an official at the state-owned utility, the country’s largest. The executive declined to be named.

Bhel, India’s largest power generation equipment maker, will collaborate with Andhra Pradesh Power Generation Corp. Ltd (APGenco) to build IGCC power plants, an official at the public sector enterprise said on condition of anonymity.

“We had clarified to Bhel that whatever work they have done on the IGCC technology would remain with them. However, after the formation of the joint venture for the same, we wanted joint ownership on the IPR which was to be developed together. They did not respond to that," the NTPC official said. “We will (now) ask for offers from engineering, procurement and construction (EPC) contractors."

India’s first IGCC project with an installed capacity of 125MW will be built by Bhel and APGenco at Vijayawada, Andhra Pradesh. The other 300MW Bhel project was to come up at Auriya in Uttar Pradesh in association with NTPC.

These plants required a combined investment of Rs3,400 crore.

Mint reported on 4 February about the IPR dispute stalling the initiative.

The government had asked the two public sector companies to set up IGCC plants as these significantly scale down harmful emissions. India, with a current power generation capacity of 145,000MW, expects to add an additional 78,577MW by 2012, of which around 46,600MW will come from coal-based projects.

While it costs Rs4 crore per MW to build a conventional power plant, an IGCC plant costs twice as much.

Saying that his firm was aware of the patent row between NTPC and Bhel on IGCC technology, APGenco managing director K. Vijayanand said: “APGenco had sought clarity on the issue from Bhel, which clarified that they own the patents on the technology. We don’t think it (patent dispute) should affect our project."

Coal is the primary fuel for NTPC as at least 80% of its installed capacity of 30,644MW is powered by the fuel. With 67% of the total power generation currently based on coal, the power sector is the largest consumer, absorbing nearly 78% of India’s coal production.

“More efficient technologies have to come in. There are a lot of new technologies being tried globally," said Vikas Kaushal, a partner at management consulting firm A.T. Kearney. “Utilities would have the need to adapt to bring down emissions."