East Coast Energy to set up 1320 MW plant in Srikakulam

East Coast Energy Ltd is setting up a thermal power plant at Kakarapalli in Srikakulam district . It plans to begin generation by March, 2015, though there has been a delay in executing the project, said Krishna V. Tatineni, Managing Director. The project will have two units of 660 MWs each. Tatineni said on Thursday that “the company is planning to accelerate the execution shortly. We want to commence generation by March 2015.” He said the company had allayed the apprehensions of the local public on the issue of pollution.

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“We are employing state-of-the-art super critical technology which reduces emissions of greenhouse gases by 6.5 per cent. In spite of the higher cost, we are adopting the technology. We have made arrangements for export of fly-ash and the balance would also be disposed through the advanced slurry disposal system. “The project has received the host country approval for clean development mechanism (CDM) from the National CDM Authority of the Ministry of Environment and Forests and we are the first independent power producer in South India to do so,” he said. Tatineni said the company had recently finalised a long-term power supply agreement with the AP Government for 300 MW at Rs 2.97 per unit during the first full year of operations and over the next 25 years in accordance with the PPA. “The power from this project will be one of the cheapest for coal-based power plants that are coming up in the State,” he added.

He said the current project cost was Rs 6,571 crore, with a debt/equity ratio of 3:1. There may be a bit of cost overrun due to the delay in the execution of the project but it would be within manageable limits. The MD said the sector was encountering huge problems related to fuel supply, land acquisition, financing, policy hurdles at the State and Central levels, environmental clearance and the protests against setting up of power plants. “Another serious issue plaguing the sector, but not being taken cognisance of by the planners, is the likely decommissioning that will be required of projects that have outlived their lives of 25-30 years. Though these projects continue to generate power even today, the issue is ‘at what cost’? “In the same land area of the current power plant – a larger plant can be set up using super-critical technology and the already scarce commodity, coal, can be put to more efficient use than by supplying to an older technology power plant that has outlived its life. If such old plants are not decommissioned, we will be short by another 25-30 per cent of the current capacity generation and we will be staring at an even larger demand-supply gap. Therefore, there is no choice but to set up new thermal plants,” he argued.

-Hindu Business Line