Monday 17 December 2018

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Infrastructure | Power

Reliance power to continue, but at lower rate with LPG

 

Goa has decided to continue purchasing private power from Reliance Infrastructure Ltd, but at a lower rate by almost Rs five per unit, provided it immediately shifts over to LNG from Naphtha.

As the Power Purchase Agreement signed for 15 years with RIL in 1997 ends in August next year, the government plans to review the decision on continuation with RIL later.

The government had earlier thought of stopping purchasing power from RIL due to its unaffordable price of Rs 13.53 per unit.

The new price per unit however would be Rs 8.58 per unit.

The cabinet thus today approved the proposal of continuing to purchase RIL power, but at a lower rate and manufactured from Liquefied Natural Gas, the proposal put forward by RIL itself.

In case Goa had stopped purchasing power from RIL, the open market rate for power is Rs 4.8 per unit while the state sells it to industries at Rs 3.30 per unit.

It would thus be a loss of Rs 1.50 per unit, amounting to the loss of Rs 1.50 crore every month.

In addition, the government is bound to pay a fixed cost, as per the PPA, Rs 1.47 per unit in lieu of not purchasing power from them.

The total cost of open market power purchase could be thus Rs 7.82 against Rs 8.58, the new price per unit offered by the RIL.

 

“The difference is hardly 96 paise per unit, which is negligible”, said chief minister Manohar Parrikar.

Secondly, it could affect the whole power scenario in the state since the RIL also sells the power to many industries.

While the state purchases around 96 lakh units from RIL every month, almost 73 industrial units as well as MPT purchases 99.96 lakh units from RIL every month.

In case Goa government stops purchasing power, the RIL said it will shut down the plant since running the plant would be unaffordable.

The state is the main buyer of RIL power with 19.8 MW against its generating capacity of 48 MW.

Parrikar said the state is already running with power shortage and stopping RIL power could mount the shortage up to 100 to 120 MW.

In order to overcome the power crisis, Parrikar said the government is also thinking of coal block project, which may start by July. 






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