CLP gets nod to build 1200 MW gas power plant in Gujarat

China Light and Power (CLP) India has finally received technical approval from the Central Electricity Authority for its 1200 MW gas fired power plant in Gujarat.
According to Business Standard the project, which is expected to cost Rs6000 crore ($1.35bn), involves expansion of its existing Bharuch plant.
The expansion has been held up due to unavailability of natural gas. Recently, the Central Electricity Authority appraised the project for domestic gas allotment, and it might get a fuel allocation in the 12th Five Year Plan starting 2012.
"As far as the readiness is concerned, we think we will one of the first few to get gas," said Naveen Munjal, Director Business Development, CLP Power India.
The combined-cycle gas fired plant in Gujarat, currently has a capacity of 655 MW. The company planned to expand it about five years back. However, the plan could not go through as domestic gas was not available. Buying imported natural gas was not viable.
"The prices of liquified natural gas (LNG) are linked to crude oil prices. The tariffs currently prevailing in the Indian Power Sector cannot sustain usage of only LNG as a fuel," said Munjal.
Currently, the spot prices are at approximately $15 a million British thermal unit, and going by this, the variable cost itself will be close to Rs4.50 a unit. With fixed charges and transmission charges, the total cost per unit will be well over Rs6 per unit.
Unlike many gas fuelled power projects under construction, the company does not plan to construct the project before a committed fuel allocation. "There is no point in building a project and not using it to generate power – it won’t even receive the shareholders and lenders’ approval" said Munjal.
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