MSEB sources told FE that these are preliminary projections as it was prepared to a hard bargaining with the new buyer of Dabhol assets.
MSEBs dedicated capacity of phase-I is 658 mw and phase II is 448 mw(of the total 1,444 mw) thereby totalling to 1,106 mw. MSEB has the option for purchase of excess power beyond 1,106 mw to be exercised before financial close by June 2004. The additional Dabhol power would help reducing the peaking shortfall throughout the 10th and 11th pla. There would be surplus of energy of 5,127 million units (MUs) in 2006-07, 3,467 MUs in 2007-08 and 8,123 MUs in 2011-12. Considering the above energy surplus, it is desirable that take-or-pay obligations for both phase-I and II may further be negotiated to reduce them further. MSEB should retain the first right of refusal on capacity beyond 30 per cent of phase-II, sources said.
According to MSEB, when the Dabhol plant would operate on naphtha (for about 20 months) the variable costs for the same being Rs 2.23 per unit it may rank in the merit order scenario above certain third party power purchase (Tata Power Companys Rs 2.50, NTPC Kawas projects Rs 2.79 and certain Power Trading Corporation purchase ranging from Rs 250 and Rs 2.80).
When the restructured Dabhol project operates on gas, after March 2006, variable cost to bee considered for merit order would be substantially lower than Rs 1.27 per unit and therefore may figure substantially high on the merit order scenario. This may result in reduction by MSEB of third party power purchase (from NTPC, Nuclear Power Corporation, PTC and TPC).
Typically naphtha contracts do not have take-or-pay provisions. It is assumed that the newnaphtha contract would not provide take-or-pay. MSEB would insist on the same at the same time of approving naphtha contracts.
MSEB sources said take-or-pay arrangement envisaged for LNG supply. Assuming that LNG take-or-pay level is pegged at the guaranteed offtake of 7,920 MUs, MSEBs obligations is reduced by 7,336 MUs which reflects a relief about 48 per cent.
Fixed charge for naphtha based plant is assumed at 57 paise per unit (Rs 2.80-Rs 2.23) and fixed charge for LNG based plant would be Rs 1.53 per unit (Rs 280-Rs 1.27) and excluding re-gas charge works out to Rs 1.37 per unit.