In an effort to encourage the private sector in the power sector, the Uttar Pradesh government has decided to allow co-gen plants to set up additional power generation capacity on conventional fuel such as coal or gas to generate power all round the year. The government has amended its Energy Policy to also drastically scale down the state?s share in getting power from the existing 90% to just 50% of the saleable energy of cogenerating units.
According to sources in the power sector, this has been done to improve the availability of power in the state. The state has also decided to allow the private developers the liberty to sell 50% of the additional generation in off season anywhere under the open access system.
Earlier, the Energy Policy 2008 has stated that the State government?s share of power from the project would be 90% of the installed capacity and cogen plants were to use conventional fuel such as coal or gas to generate power only during the off season.
This will not only incentivise setting up cogen plants, especially by sugar mills in the state which already have surplus land at their disposal, but would go a long way in plugging the huge gap of almost 4,000 mw in demand and supply of power.
It may be mentioned that there was a strong demand from the private investors to scale down the state?s share in power from existing 90% to just 50% and the option to use conventional fuel all round the year will also come as a great help as the units will no longer have to depend on the availability of bagasse, which is already in short supply this year due to the shortage of sugarcane availability.
Interestingly, based on the Mayawati government?s new Energy Policy, Bajaj Hindusthan, the country?s biggest sugar producer, has announced an investment of Rs 1,600 crore for creating 400 mw of power generation capacity through five new coal-based plants of 80 mw each located in its sugar factories in UP.
The provision of allowing coal as fuel for firing the boiler was formulated for ensuring round the year power generation from the cogeneration units.
Presently the co-generation units operate only during the sugar cane crushing season, using bagasse.