Reliance Power Sets Sights on 5,000 Megawatts This Year

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--As one of India's major companies, Reliance Power Limited (BSE:532939) (Mumbai), which is controlled by billionaire Anil Ambani, seems to be safe in its goal to have 5,000 megawatts (MW) of installed and operating generation capacity by the end of this year.

Having reported a 24% rise in consolidated net profits, the company seems justified in feeling confident in its target, considering that it already has an operating power portfolio of 1,240 MW, ranging from coal-fired, gas-fired, hydropower and renewable energy sources.

But nothing is certain in the Indian power generation scene at present, and Reliance has a 2,400-MW plant in Andhra Pradesh that cannot operate because of a local gas shortage. This situation could be repeated with coal-fired stations--not necessarily, but strangulation from a lack of coal supply is currently happening to thermal power projects.

On the plus side, Reliance Power has successfully commissioned the 1,200-MW Rosa plant in Uttar Pradesh four months ahead of the power purchase agreement. The 600-MW Phase I of the project operated at 86% availability over the year and generated a net profit of $61 million.

Reliance has completed the boiler hydro test of the first 660-MW unit of the 3,960-MW Sasan ultra mega power project (UMPP) in Madhya Pradesh. The unit is scheduled to be commissioned in December this year.

The company's 600-MW Butori project is set to be commissioned in the second quarter of the current fiscal year, and the 2,400-MW Samalkot power station in Andhra Pradesh is also scheduled begin operations.

With its financial resources, power and influence, Reliance Power should be able to make the 5,000-MW target this year, and if it does, the company could be a pathfinder through the morass of dysfunctions at play in India's power sector at present.

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