Financial Daily from THE HINDU group of publications
Friday, Oct 18, 2002
Industry & Economy
TNEB to focus on transmission Tap Centre, pvt sector units for growing demand
CHENNAI, Oct. 17
THE Tamil Nadu Electricity Board is unlikely to invest its own money in generation and will instead tap the Central power utilities and the private sector for further increasing generating capacity.
An indication to this effect is given in the tariff revision proposal filed by the board before the Tamil Nadu State Electricity Regulatory Commission.
"The strategy of the TNEB is to conserve and maximise the precious internal resources for the much needed investment in transmission and distribution sector by leveraging the investment capacity of Central utilities such as NTPC, NLC and NPC as well as private sector in generation," the TNEB has said in the proposal.
The TNEB is in the process of setting up gas-based power plants at Perungulam and Kuttalam, expected to be commissioned in 2002-03 and 2003-04, with a total capacity of about 200 MW.
Besides, it is also putting up a few mini hydel plants.
According to official sources, the question of the TNEB investing its money in generation will arise only when there are surplus funds.
The TNEB, being cash-strapped, has to prioritise where it will spend its money.
Improving the transmission and distribution network, to reduce the line losses, requires an investment of about Rs 1,000 crore a year, according to the sources. Therefore, the TNEB prefers to invest money on strengthening the transmission and distribution network, rather than on generation, according to the sources.
It may be recalled that the TNEB signed an agreement with the National Thermal Power Corporation to set up a 1,000 MW coal-based plant at Ennore, where the TNEB has a power plant.
The proposed power plant will use the TNEB's external coal handling facility at the Ennore Port.
The TNEB and the NTPC are in the process of forming a shell company for this project after which a detailed project report is to be prepared.
Similarly, according to the sources, the TNEB has proposed a 500 MW coal-based power project as a joint venture with the Neyveli Lignite Corporation in Tuticorin. The TNEB has a coal-based plant at Tuticorin, which also has a port.
In the tariff revision proposal, the TNEB has said the energy requirement in the State has been growing at the rate of six per cent every year.
The increasing demand is sought to be met by power purchase from NTPC and NLC from their proposed projects, as well as the new coal-based projects to be implemented as joint ventures with them.
The electricity board is also pursuing the LNG-based power project at Ennore, to be implemented by a consortium led by the Aditya Birla group, and the 500 MW Jayamkondam lignite-based project to be put up by the Reliance group.
According to the sources, the TNEB has committed to the promoters of the LNG project that it will buy 1,100 MW of power from the project.
A payment security mechanism has also been prepared and given to the project promoters for them to get approval from their lenders.
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