Sterlite Energy Outsources Operation and Maintenance of Jharsuguda Power Plant to Germany's Evonik Energy Services

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Researched by Industrial Info Resources (Sugar Land, Texas)--Sterlite Energy Limited (SEL) (Mumbai), India's power generation company, has outsourced the operation and maintenance of its Jharsuguda power plant in western Orissa to Evonik Energy Services India Private Limited (Noida, Delhi), a wholly owned subsidiary of power producer Evonik Energy Services GmbH (Essen, Germany). A deal to this extent was finalized between the two firms. SEL is a group company of diversified metals and mining company Vedanta Resources plc (LSE:VED) (London, England). The agreement has been reported to be the largest-ever operation-and-maintenance deal for coal-fired power plant in India. The synergies of the two firms will help to increase their prominence in the sector.

The $1.84 billion, 2,400-MW independent power plant at Jharsuguda comprises four units of 600 MW each. All the units are in their final stages of commissioning, with the first unit set to commence operations as early as May 2010 and the other units within a year. The engineering, procurement and construction contractor of the project is SEPCO-III Electric Power Construction Company (Qingdao, China).

Under the seven-year operation-and-maintenance agreement, which is reportedly valued at $315 million, Evonik will train the plant staff for daily operations using simulators, apart from implementing and maintaining diagnostic systems to optimize plant functionality online to achieve high availability and heat rates. Under the terms of the agreement, Sterlite will pay Evonik almost $45 million each year for seven years.

Evonik will install its indigeneous plant management and fault prediction systems at the plant, thus minimizing plant maintenance downtime. Environmental systems, as well as community health and safety mechanisms of international standards, are expected to be covered under the deal.

Evonik Energy, the fifth-largest power producer in Germany, has a generation capacity of 8,000 MW. The company runs 15 power plants domestically, eight of which are fed by hard coal, and six plants are cogeneration ventures supplying steam and heat.

Evonik India is looking to pick up equity worth $133 million over the next couple of years in projects where the company participates as an engineering and services partner. Key sectors will include operations management, IT services, design and engineering, and power, especially solar-thermal projects.

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