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Maharashtra government to revive shut projects for more power

The Maharashtra government is planning to get 1,500 MW of stranded power capacity on track by reviving private projects shut down due to lack of power purchase agreements (PPAs). This non-inking of PPAs has left these projects with no buyers for their electricity, which has forced them to stop generation.

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The Maharashtra government is planning to get 1,500 MW of stranded power capacity on track by reviving private projects shut down due to lack of power purchase agreements (PPAs). This non-inking of PPAs has left these projects with no buyers for their electricity, which has forced them to stop generation.

The proposal will enable consumers to get power at cheaper costs and revive the idle assets of these independent power producers.

"We are planning a policy to revive around 1,500 MW of shut down private power projects. They can enter into private-public partnerships (PPP) with us, with we (the state government) contributing equity," said energy minister Chandrashekhar Bavankule. He added that these projects had been shut down because of lack of buyers for their electricity in a surplus market as they had not inked any PPAs with distribution utilities like the Maharashtra State Electricity Distribution Company Limited (MahaVitaran).

"The capital costs of new power projects are around Rs8 crore per MW, while these projects have been commissioned earlier at a lower cost of Rs5 crore per MW," said Bavankule, noting that the cost of this power would hence be lower than any new power projects. "We will contribute the equity and sell the power through the reverse (tariff-based) bidding method," he added.

According to the state energy department's records, these shut down private power projects have a 1,506 MW capacity and include Abhijit Energy, Nagpur (246 MW), Dhariwal Energy (600 MW) at Tadali in Chandrapur district, Ideal Energy (540 MW) at Umred in Nagpur, and Gupta Energy at Chandrapur (120 MW).

Thermal power makes up for a large part of the Maharashtra State Power Generation Company Limited's (MahaGenco) installed capacity of 11,237 MW. This comprises of 7,980 MW coal-based thermal power, 672 MW on gas and 2,585 MW hydroelectric projects. It has commissioned around 180 MW solar power projects and plans to take it to around 450 MW by the end of the 2015-16 fiscal, which is one of the highest by state utilities.

The MahaGenco plans to add another 3,230 MW capacity in coal-based thermal power by the end of the 2015-16 financial year.

The state government is planning to scrap the MahaGenco's proposed coal-based projects which were unviable due to higher costs of transporting coal, which in turn, would hike power rates. Instead, this land at Dondaicha, Paras and Bhusawal would be used to establish solar energy projects.

The state is, however, planning an around 4,000 MW pithead-based power plant near a coal mine allocated to it at Raigarh in Chhattisgarh. Another 660 MW supercritical power project is planned at Nashik and in a first-of-its-kind initiative, this may be done with participation from private players, who will hold a controlling stake.

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