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Home News Power Sector News Adani Power threatens to pull the plug on projects

Adani Power threatens to pull the plug on projects

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AdaniUnable to get coal linkages, Adani Power  said it will hold back plans to invest `32,000 crore to set up power projects. The company joins a long list of claimants for the fuel across India, including the Anil Ambani Group, from Coal India and its subsidiaries. Adani Power is setting up three projects - at Chhindwara in Madhya Pradesh (1,320 mw), Dahej in Gujarat (2,640 mw) and Bhadreshwar in Gujarat (3,300 mw).

Despite obtaining mandatory clearances, its power generation plans remain in limbo due to lack of clarity on fuel supply. Ravi Sharma, CEO, Adani Power, said because of this, the company is not able to sequence its equipment orders.

"Till I don't know what grade of coal I will get for my plants I would not be able to decide on boiler specifications. Coal linkages are must for any project," he said.

The three plants will generate 6,500 mw. It takes about `4-5 crore to build one megawatt of generation capacity.
Sharma said state distribution companies have not been coming up with power purchase agreement (PPA) tenderseither in the past few months because coal linkages have not been frozen.
"That's because distribution companies, which buy the power from generators, are not sure which way coal prices are headed," he said.

Sharma said two units of 660 mw each at Tirora power plant in Gondia will come up before the end of this fiscal which will take the installed capacity of Adani Power to 6,000 mw by March 2012.
"In the 12th Five Year Plan (2007-12), India would add 60,000 mw and our company would contribute 10 per cent of the total capacity addition which is highest by any private player," he said.

Nonetheless, Sharma was confident that by March 2013, the company would generate 10,000 mw. "In the 12th Five-Year Plan, we will maintain our momentum and would contribute over 10% of the capacity generation in the country," he added.
Will the threat work? It remains to be seen, said analysts.

"Many power plants that already have linkages from Coal India and its subsidiaries are not getting feedstock for their existing projects, so it is unrealistic to think Adani Power would get fuel assurance for its yet-to-be-ready power projects," said an analyst with a domestic brokerage, seeking anonymity.

Source- DNA


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