MP in talks with Rel Energy, Essar Power

The Madhya Pradesh government is making efforts to augment power generation. The state government is in talks with two companies "" Reliance Energy and Essar Power "" for power purchase agreements.

The companies will supply nearly 1,400 Mw. The state has inked a deal with the Lanco group for purchasing 600 Mw. Lanco has issued a letter of intent to supply power at Rs 2.34 per unit from its Orissa project. These companies will supply power after four years for 25 years.

Confirming the reports, Sanjay Bandopadhyay, energy secretary, said: "We are negotiating with them (Reliance and Essar) and we expect to purchase power at as low as Rs 2.40-2.45 per unit. We had floated tenders for purchasing 2,000 Mw. Lanco has committed to supply 600 Mw at Rs 2.34 per unit."

He added: "Reliance has offered power at Rs 2.70 per unit, while Essar has offered at Rs 2.94-3.04 per unit."

The state is purchasing power from Gujarat at Rs 9 per unit, excluding transmission charges.

"We are purchasing 450 Mw at Rs 9.50 per unit (including transmission charges) from Gujarat, which is costly," he said.

The state is facing a shortage of 1,100 Mw when peak demand (evening) reaches 6,271 Mw against the supply of 5,110 Mw. Three units of the state, namely the Sanjay Gandhi Thermal Power station of 500 Mw, the Amarkantak station of 210 Mw and the Satpura thermal power station of 210 Mw went out of order due to technical problems.

The state's 1,000 Mw Indira Sagar project and 520 Mw Omkareshwar power project are generating a total of 604 Mw (the capacity is 1,500 Mw) since the reservoirs of these plants have been capped at a certain limit following a state high court order.