India's Torrent Power to Augment Gas-Fired Sugen Mega Power Project to 4,500 Megawatts

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Researched by Industrial Info Resources (Sugar Land, Texas)--Torrent Power Limited (BSE:532779) (Ahmedabad, Gujarat) has announced plans to ramp up the installed capacity of its gas-fired Sugen mega-power project to 4,500 megawatts (MW) from the existing output of 1,147.5 MW. The expansion will be part of the second and third phases of the project, spanning five to seven years from now. The $646.8 million project recently was commissioned with three units of 382.5 MW each. Starting this month, 200 MW of power from the plant is scheduled to be distributed to the state of Rajasthan.

The natural gas-based, combined-cycle power plant is strategically located in the village of Akhakhol, in the Surat district of Gujarat. Gas feed for the venture is being sourced from the gas fields of Krishna-Godavari basin, which is operated by Reliance Industries Limited (BSE:500325) (Mumbai), and the Panna-Mukti-Tapti fields.

The site enjoys proximity to all natural gas and liquefied natural gas (LNG) sources in the neighborhood, including the pipeline network of Gujarat State Petronet Limited (BSE:532702) (GSPL) (Gandhinagar, Gujarat), which is 20 kilometers from the plant site, and the Hazira-Bijaipur-Jagdishpur pipeline of GAIL India Limited (BSE:532155) (New Delhi), which is 12 kilometers away. The Dahej-Uran pipeline is to be built within 19 kilometers of Akhakhol. The LNG terminals of Hazira and Dahej are 50 kilometers and 100 kilometers, respectively, from the plant. Power distribution utility Torrent Power SEC Limited (Surat, Gujarat) is 30 kilometers from the Sugen power plant. Located on National Highway 8, Akhakhol is only 2.5 kilometers away from the Tapi River.

Power generation from natural gas has been found to be less harmful and costly than coal-based ventures. The Sugen power plant is expected to operate at 58% thermal efficiency, with build costs per MW of output capacity pegged at $570,000; in comparison, coal-based power ventures entail build costs of $860,000 to $1.08 million per MW of power generation output capacity. Further, the plant design is anticipated to considerably reduce effluent emission rates, as the facility will operate only on gaseous fuel, unlike other gas-based power plants that are capable of handling liquid fuels as well.

The Sugen mega-power project is reported to be part of Torrent Power's vertical integration strategy, under which the group's companies will distribute 75% of the power output from this facility, while the 25% balance output will be marketed to PTC India Limited (BSE:532524) (New Delhi), formerly Power Trading Corporation of India Limited, for subsequent sale to other needy states. Torrent Power already has signed a power purchase agreement with PTC for the sale of 100 MW of power.

In addition to the Sugen plant, Torrent Power is involved in other power generation and distribution projects in the country and is looking to diversify into the renewable energy sector simultaneously. The firm is active in Agra, Bihar, Kanpur and Rajasthan, and proposes to further expand its power distribution network in the state of Uttar Pradesh. In a joint venture with Power Grid Corporation of India Limited (BSE:532898) (PGCIL) (Gurgaon, Haryana), Torrent Power plans to construct a 400-kilovolt (kV), double-circuit transmission line between the Sugen plant and Ahmedabad, also linking up with PGCIL's existing power network at Dehgam, in the Gandhinagar district of Gujarat.

Torrent Power's power generation ventures in the pipeline include a 1,500-MW, gas-based plant at the Dahej special economic zone. Global tenders have been floated for the Dahej plant, which is expected to be built in a phased manner. Two coal-based ventures also are in the cards, with a 1,000-MW plant planned at Chhattisgarh and a 2,000-MW plant at Pipavav, in Saurashtra, Gujarat.

On the renewable energy front, Torrent Power has been keen on solar and wind energy projects. The firm has secured a 25-MW solar power project from the state government of Gujarat. The firm also has established ties with the state to build a windfarm for an estimated $129.36 million.

Torrent Power's group of companies enjoys a prominent place in the power and pharmaceutical sectors in India, with four companies handling the power generation and distribution business segment: Torrent Power Limited, Torrent Cables Limited, Torrent Power AEC Limited, and Torrent Power SEC Limited. Torrent Power, which has a power-generation capacity of 1,647.5 MW, including the Sugen Plant, has a customer base of about 1.9 million, located mainly in Surat and Gandhinagar in Gujarat. The company distributes more than 10 billion kilowatt-hours of power over an area of 408 square kilometers.

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