Maharashtra Chief Minister Devendra Fadnavis on late Thursday evening will meet the former Union Minister Sharad Pawar and representatives from the sugar industry to discuss the fate of bagasse based co-generation projects and the electricity sold to the state-run Maharashtra State Electricity Distribution Company (MahaVitaran).
The cooperative and private sugar mills have already set up a collective generation capacity of 2,000 MW and most of which is being purchased by MahaVitaran through a long-term power purchase agreement (PPA).
However, MahaVitaran, which is currently passing through a deep financial crisis largely due to mounting arrears from the agriculture consumers which are Rs 19,000 crore, has indicated that it would be difficult to continue power purchase from these plants and also from those in the pipeline citing high power purchase cost which ranges between Rs 6.10 and Rs 6.50 per unit. MahaVitaran has argued that the power is currently available in the open market and on exchanges at Rs 2.50 per unit to Rs 3.75 per unit and continuation of power procurement by bagasse-based cogeneration plants won’t be cost effective.
A spokesperson for the state power minister Chandrashekhar Bawankule said the minister had already chaired a meeting on Tuesday with the representatives of the sugar industry and also officials of the energy department, MahaVitaran, and Maharashtra Energy Development Agency. ‘’The government in its renewable energy policy has estimated bagasse-based cogeneration capacity at 2,000 MW which includes both the power used by the sugar mills for their consumption and also sold to the MahaVitaran. However, sugar mills have taken objection to it saying that the power consumed from these plants cannot be calculated to estimate total installed capacity. Besides, sugar mills want that another 300 MW of capacity which is being set up some 16 sugar mills needs to be tied up by MahaVitaran. Therefore, a committee was set up to look into these issues and it was later decided that the final decision in this regard will be taken at the level of Chief Minister.’’ He informed that today’s meeting convened by CM will take into account the present situation.
On its part, senior leader from the cooperative sugar industry, who will be present at today’s meeting, said the sugar mills have set up these plants under the government’s policy to promote renewable energy in the state and therefore they don’t want the government not to tweak its own policy especially when large investment is being done. The sugar mills have been provided a slew of incentives for installation of these plants.
"The per megawatt cost is estimated at Rs 3.50 to 4 crore for bagasse-based cogeneration plant in which high capacity boilers are installed for efficient operations. These plants are generation capacity ranging between 3 MW and 18 MW. Sugar mills are of the view that the MahaVitaran needs to continue the power procurement from such plants and the government can lend help to MahaVitaran,’’ he said.
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