The power plant will recycle the waste heat from the kiln of the sponge iron unit and generate power.
Shyam Group vice-chairman and managing director B Bushan said the plant would fulfil the requirement of power required for running furnaces. The excess power could be sold to the West Bengal State Electricity Distribution Co Ltd (WBSEDCL), he added.
Shyam Sel has already entered into an agreement with WBSEDCL to push excess power to the grid. The captive plant, apart from reducing the company's operating cost, will also fetch a preferential tariff if it pushes excess power to the grid. The company is also exploring possibilities of earning from carbon credits.
Bhusan said the plant has been set up on a 6-acre plot, a part of the sponge iron and billet making unit's 25-acre area, entailing an investment of Rs 35 crore.
While the plant will create direct and indirect employment for more than 200 people, it would also ensure minimum level of pollution.
Shyam SEL has recently signed a memorandum of understanding (MoU) with the West Bengal Industrial Development Corp (WBIDC) to set up an integrated steel and power complex of 1.1 million tonne per annum and a 1000mw plant at Jamuria near Asansol at a cost of Rs 9,900 crore.
"We want to start the project work by the end of this year and finish it within a record time," Bhusan said.