IPPs asked not to use PGCIL line for power supply to Odisha grid

Generators fear compression of margins following the new norm

The Odisha government has directed the independent power producers (IPPs) to deliver its share of power at its own substations and transmission lines, instead of transmission network of Power Grid Corporation of India Ltd (PGCIL).

“Government is in the process of executing supplementary MoUs with the IPPs incorporating a provision to the effect that the IPPs shall deliver the state’s share of power at the designated substations of OPTCL, so that the interstate transmission charges payable to PGCIL can be avoided,” said a source in the Energy department.

As per existing practice, IPPs had plans to connect to PGCIL transmission system for sale of power throughout the country and would have used the same line to provide power to Odisha. But the state government’s new norm is likely to affect the business prospects of the private power producers to some extent, said experts.

“It is likely to affect the business margin of private producers as they will have less option to sell their power outside the state in case of fall in demand from the state. The state government at the same time must construct better evacuation system for availing such power,” said an official of Ind Bharat, an IPP.

The Odisha government has signed agreements with 29 private developers with combined generation capacity of 38,000 Mw power. As per the agreements, the IPPs have to sell 14 per cent of total generated power to the state network at a subsidised rate. The state government aims to get around 2,000 Mw power from private power stations by 2015 and hence, has come up with large transmission network plan.

The Odisha Power Transmission Corporation Limited (OTPCL) is in the process of setting up three high capacity substations with an estimated investment of Rs 1,000 crore for sale of surplus power.

The substations having 400/220/132 KV capacity would be constructed at Lapanga, Meramundali and Khuntuni. While work for construction of Lapnga substation has already started, land acquisition and other formalities are being chalked out for other two units.

“OPTCL has proposed 400/220 kv grid substations for drawal of state’s share of power from the proposed IPPs. In the event of availability of surplus power from the IPPs, it is planned to sale the Odisha share directly to CTU (central transmission utility) to which the IPPs are planning to connect,” said the Energy department source.

Currently two IPPs, Sterlite Energy and GMR Energy are operational in the state. Another two IPPs, Ind Bharat and Maa Durga Thermal Power are expected to start supplying power to the OPTCL grid in 2014-15.