Power play

  • 16/01/2005

  • Business India (Mumbai)

The potential of non-conventional resources may be limited, but the Rajasthan government is keen to tap all avenues at the earliest. It has come up with a policy document for promoting generation of electricity through non-conventional sources. In the past, three such policy frameworks had been issued, but not much in the form of generation could be achieved. "We are confident that the new policy document will generate enough confidence among private investors as it contains a slew of attractive features," informs Rakesh Verma, chairman and managing director of Rajasthan Renewable Energy Corporation Ltd. According to Verma, power projects to tap non-conventional sources for generating about 400 mw of energy are already in the pipeline and more projects are being firmed up. Already about 216 mw of power is being produced in the state by tapping non-conventional sources. The policy has fixed the rate at which the discoms (power distribution companies) will purchase power from the developers ranging from Rs2.91 per kwh to Rs3.36 per kwh in a timeframe of 2004-5 to 2023-24. For the power produced from biomass, the rate payable will vary from Rs3.32 per kwh to Rs3.92 per kwh during the same timeframe. Among the incentives announced by the government for the generation of power (from non-conventional sources) the important one is the relief given in the electricity duty to the extent of 50 per cent. The power developers will also be treated like any other industry so as to become eligible for concessions from the banks and industries' department. A state-level all-powerful empowered committee has also been formed to give project clearances without waste of time. The government will give land at concessional rates to the extent of 10 per cent prescribed by the district level committees. The Rajasthan Renewable Energy Corporation will act as a nodal agency for power projects, playing the role of facilitator. The power developer will deposit a refundable amount of Rs5 lakh per mw as security deposit towards completion of the project within the prescribed timeframe. For extension of the time given, the developer will be required to pay extra ranging from Rs50,000 per mw to Rs5 lakh per mw depending on the time sought. The security deposit will however stand forfeited by the corporation in the event of failure of the developer to adhere to the prescribed time schedule. The slew of strings attached in regard to the project implementation and adhering to the timeframe are however being adversely commented upon by prospective developers. The government should adopt a liberal stance if there are delays, and instead of imposing penalties it should sympathetically look into the problems faced by the developers. "The government is keen to attract such developers," says a private developer. The one unanimous point made by the developers is that the visibility of the government should be reduced to the minimum so that the implementation work goes through without hiccups. The area is somewhat new for most of the developers and the government should be liberal in dealing with them. The non-conventional sources of energy identified are solar, wind, mini-small hydel and biomass. Efforts are also being made to tap the solar energy in the state though the scope available is limited. At Mathania, near Jodhpur, a combine-cycle integrated power project is coming up using both solar and gas as fuel for generation. The project will cost about Rs800 crore with an installed capacity of 140 mw. Of 140 mw, the solar component will provide 35 mw. The project has been cleared by the Union cabinet. The power producers have been given couplet freedom to use power generated by tapping non-conventional sources in any way. The power could be used within the house or sold to the discoms. With the discoms, the power purchase agreements are being signed by the producers at rates prescribed in the policy document. With the government showing interest in tapping non-conventional sources, there is no doubt that Rajasthan will have plenty of power in due course to meet growing needs. The role will however be supplementary to the large power projects coming up in the state on gas and coal.