Coal India (CIL) is foraying into the solar power sector with a view to make use of its whopping cash reserve of above R60,000 crore in a meaningful way.
CIL chairman and managing director S Narsing Rao told FE there are business opportunities in the solar power sector and a scope to take some climate mitigation initiatives as well. ?Foraying into solar power is expected to give us returns higher than the interest we are earning. It would also be a carbon mitigating project,? Rao said.
CIL?s interest earning for the half-yearly period in FY13 rose 29% year-on-year to R2,930 crore and is expected to surpass R6,000 crore by the end of year. The government has also been putting pressure on the company to make use of its cash reserves by picking up stakes in other PSUs like IOC, ONGC, HPCL and SAIL. But CIL has been resisting the idea since return from equities was not as assured as interest earning.
CIL?s solar projects would supplement the country?s alternative energy needs as well and help in achieving the Jawaharlal Nehru Solar Mission target of generating 20,000 MW by 2022. Besides, earning was through a preferential tariff offered by the government. However, CIL?s plans in solar was at the drawing board stage and it was making the risk assessment before taking the final call, Rao said.
Central Mine & Planning Design Institute chairman and managing director AK Debnath said CMPDI has been asked to prepare a concept paper and it was in the process of identifying areas where solar projects could come up. Areas under Eastern Coal Fields (ECL), Bharat Coking Coal (BCCL) and Central Coalfields (CCL) were best suited for setting up solar projects since the tropic of cancer runs through these areas. But CMPDI was only making the preliminary assessment since as mining consultant it didn?t have the expertise to work on solar projects, Debnath said.
Rao said CIL would rope in a consultant to prepare plan for the project.
Apart from generating solar power, CIL has embarked on pit head thermal power projects with a view to use coal that cannot be evacuated. ?While we are looking at a solar portfolio with more of a business proposition, our plans in the thermal power sector is not driven by a business motive. We want to only utilize coal, which cannot be evacuated, by setting up pit head power plants. CIL has identified five locations that can give us a thermal portfolio of around 8,000 MW,? Rao said.
He however didn?t want to say the areas in which CIL was contemplating thermal projects but said the 2×800 MW project at Basundhara in Orissa under the Mahanadi Coalfields has reached the implementing stage.
MCL would shortly finalise the JV partner to implement the R8,000 crore project on a 70:30 debt equity ratio. CIL would hold 49% in the project through MCL. The JV partner will be selected through a tariff based international competitive bidding, supposed to take place soon, an MCL official said.