Maha mulls to bind IPPs to sell 50% in state

Written by Sanjay Jog | Mumbai | Updated: Jan 23 2009, 05:09am hrs
Power starved Maharashtra plans to make it mandatory for the independent power producers (IPP) to sell 50% of the commissioned capacity power generated in the state.

The government's decision will be applicable for the promoters of in all 25 upcoming power projects with the total generation capacity of 35,960 mw.

The state-run Maharashtra State Electricity Distribution Company (MahaVitaran) and other distribution companies will procure power either through the competitive bidding or based on the rate fixed by Maharashtra Electricity Regulatory Commission (MERC).

Maharashtra's proposal is an desperate attempt to tackle widening gap between demand and supply in the state as well as at the national level where the peaking shortage is 14% and energy deficit is 8%.

The first right of drawl of power or refusal will be enjoyed by MahaVitaran and other distribution companies. The state government will be facilitator for the speedy development of these projects. These projects are currently in the various stages of development.

The government's move is planned to tackle the ever increasing mismatch between the power demand and supply and also pacify the locals who are of the view that they be given priority in the power supply from projects coming in their areas.

Of the 25 project, the government has signed MoU for 8 projects way back on April 4, 2005 while letters of intent have been issued to other 17 projects which are based on coal and gas.

Ironically, of the eight projects, total of 1,200 mw of imported coal-based project is under the development by JSW Energy which plans to commission first phase o 500 mw by December this year.

State energy minister Sunil Tatkare told FE on Wednesday The government's move is crucial when the current power deficit is 4,500 to 5,000 mw. It will be binding on IPP to sell power to the extent of 50% of commissioned capacity and energy generated at any time from the project. The cabinet sub committee chaired by the chief minister Ashok Chavan will soon give its formal approval.