Coal news and updates

Saurashtra Fuels ties up with US firm to set up power plant

April 3: Saurashtra Fuels Ltd, India's leading metallurgical coke-maker, has entered into collaboration with a US-based company to set up a coke heat-fired power plant at its facility in Mundra, a senior official from the company told ICMW.

"The US-based firm will extend us a loan of about Rs 300 crore and the balance would be contributed by us to set up 90-MW coke heat-fired power plant. The cost of construction would come to around Rs 4.50 crore per MW or about Rs 400 crore," Saurashtra Fuels Director S K Sinha said.

The agreement with the US firm has already been signed and the ground-breaking ceremony for the project will be held in May 2014, Sinha said.

"As a matter of extreme caution, we will set up only four units of 15 MW each in the first phase instead of theoretical capacity of six units of 15 MW, considering our coke-making capacity and expected availability of heat," the official said.

"This has been planned considering the expected weak market situation for metallurgical coke which might lead to low capacity utilisation of our coke oven batteries in the coming days. However, in the next phase, if the coke market situation improves and we are  confident of running our plant at 100% capacity utilisation, we will be setting up the balance two units of the power plant," Sinha explained.

Asked whether it would consider selling the power to be generated from the proposed plant to the grid, Sinha said, "We will sell the power to a third party as the recent amendment in policies has allowed wheeling power for supply to a third party. This means, we will pay wheeling charges to the Gujarat government and may supply the power to any third party whether it is based in Vadodara or Ahmedabad," he said.

He, however, made it clear that till now the company has not signed any firm agreement with any purchaser for the electricity to be generated by it.

Asked whether the entire power to be generated at the proposed plants will be sold to third parties, Sinha said, "Almost the entire power would be sold because our own requirement is not that high. We currently have a requirement of 1,300 Kva or 1.3 MW, which we are getting through existing connectivity and, going forward, the demand for power is unlikely to rise. So after keeping 1-1.5 MW for our own consumption, the rest would be sold to third parties."

Ultimate goal:

Ultimately, the company is planning to enter into power generation and power-incentive projects in a big way considering the fact that they have no dearth of land.

"We have around 400 acres of land in Mundra and will utilise the excess land to set up power plants in a big way," Sinha said.