Financial Daily from THE HINDU group of publications
Thursday, Jan 12, 2006
Info-Tech - Software
Power problem: Wipro thinks `captive'
Mumbai , Jan. 11
THE Bangalore-based Wipro Technologies is exploring the possibility of setting up its own captive power plant. "We are thinking about it, we are exploring the various options available," said a company official.
He added that the requirement for a large campus such as Wipro's would be between 15 MW and 20 MW. There was a stage when Wipro was even thinking about gas as a fuel option for this before prices rose internationally, according to power industry sources.
Mr Harry Dhaul, Director-General of the Independent Power Producers' Association of India, said that this will definitely become the trend; though, according to him, IT companies already have captive power plants. Besides, most IT companies have 100 per cent power backup, usually in the form of diesel generators and UPS systems.
Fuel flexibility: IT companies would have greater flexibility in terms of fuel when it comes to captive power plants. This is because costs on this account work out to just one per cent of input costs for IT companies compared to say, aluminium companies, where power and fuel alone constitute 70 per cent of input costs, said Mr Dhaul.
While cement and aluminium companies would aim for generating power that is less expensive than grid power, this is not a compelling issue for IT companies.
"The quality of power would be most important factor for them. IT companies are doing critical work and cannot afford to risk even small power cuts," said Mr Dhaul. "Even if power costs Rs 10-14 a unit for them, captive power would still be worth it."
In recent times, IT companies have been finding it increasingly difficult as far as power is concerned.
Although Mumbai is "islanded" out in terms of power, satellite cities such as Thane and Navi Mumbai, which house many IT companies, experience frequent power cuts.
Geometric Software, while reporting higher expenses during the first quarter of the current fiscal, mentioned diesel costs for its generators (at its Pune facilities) as one of the factors responsible for bringing down profits.
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