US utility giant AES Corporation and the Orissa government have buried their differences and agreed to go ahead with the Ib Valley Thermal Power Station (ITPS) expansion programme. The ramp-up programme was in cold storage for nearly five years as AES and the Orissa government, the two partners in the Orissa Power Generation Corporation, differed over several issues including sharing of power.
Following the positive development on the expansion project, AES Corporation chairman and CEO Paul Hanrahan is coming to Orissa on July 10 to meet chief minister Naveen Patnaik and discuss the project.
The investment in the expansion project will be to the tune of Rs 8,000 crore as it will include the development of the captive coal mines and the rail link between the power plant and coal mines.
The OPGC has been allotted two coal mines of a total reserve of 530 million tonne in Manoharpur and Deep Manoharpur areas of Sundergarh district.
?The contentious issues have been ironed out and we are going ahead with the expansion project,? OPGC managing director Bibek Biswal told FE. According to him, OPGC will set up two super critical units of 660 MW each as part of the expansion programme and dedicate 50% of the generation to state grid as per the Power Purchase Agreement signed with Gridco.
Biswal said the global tender for EPC will be floated by September 2009. ?If things go as planned, the first unit of 660 MW is expected to be commissioned by the first half of 2013 followed by the second unit after a gap of three months,? he said.
PKJena, state energy secretary who is OPGC chairman, told FE that profit-making OPGC has the funds for the expansion project.
It was around 2003-04 that AES Corporation, which has a 49% stake in OPGC, decided to ramp up the capacity of its 2x 210 MW ITPS by putting up two more units of 210 MW each with an investment of about Rs 1,600 crore. Chief minister Naveen Patnaik laid the foundation stone for the expansion project too in 2004. The project, however, could not take off as the state government demanded that all the power generated from the expansion project be dedicated to the state grid.
It also sought for a revision of the PPA signed for the ITPS. The AES opposed the proposal for revision of the PPA. On sharing of power, it suggested that the project capacity be enhanced to 2×600 MW and one of the units be dedicated to the state grid.
As the difference between the two partners could not be resolved amicably, the state government constituted a task force to examine the issue and resolve it.