Patel Launches 1,200 MW Plant as India Opens Power Industry in Face of Shortfalls

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Researched by Industrial Info Resources (Sugar Land, Texas). At a time when India’s peak hour shortfall of power is predicted to hit 14-15% by July and the government is highlighting the needs of the power system in its $320 billion foreign direct investment infrastructure drive through 2010, Patel Engineering (PE) is entering the sector with a $1.1 billion investment.

The 1,200 MW thermal power plant near Bhanagar will be constructed by Patel Energy Limited with the power generated sold to power traders, captive consumers and state governments. The project, which will be set up under a special purpose vehicle, will import coal feed from abroad.

The company is actively looking to set up IPPs (independent power projects) based on this initial project and is also looking for IPP projects in the hydropower sector. Patel recently won a $183 million order in a joint venture with Gammon India from Satluj Jal Vidyut Nigam Limited for the 434 MW Rampur hydropower project.

Currently, PE has orders worth over $1 billion of which 55% are from multi purpose water supply and power projects. The balance is made up of 25% for irrigation projects and 20% in transportation and other sectors.

In a move welcomed by the power industry, the government is opening up the power distribution sector. This will allow international and local companies to deliver power directly to consumers and take away the monopoly of state controlled companies. Currently, the state monopolies have control over the grids and distribution network. Under the new dispensation distribution, companies will be able to access the network and source power from the grid and deliver to the end customer.

In terms of failing energy supplies, Maharashtra state is faring the worst with shortages of around 20% and peak hour shortages possibly hitting 25-28% in the next two months according to a survey by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

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