Essar Power commissions 600 MW unit at Mahan project

Mumbai: Essar Power has commissioned the first phase of 600 MW, of its 1,200 MW Mahan power project. The plant was synchronised with the grid and has commenced generating power, said the company in a press release on Wednesday.

The Mahan unit in Madhya Pradesh will be Essar’s eighth operational power plant. It has 3,910 MW of generation capacity, compared to 1,220 MW at the time of the company’s IPO in May last year.

The second unit at Mahan is expected to begin commercial operations during the first quarter of the next fiscal.

The Mahan-I project entails a $1.2-billion (about Rs 6,600 crore) investment by Essar Power. It is the company’s third coal-fired power project to enter commercial operations taking its total capacity of 2,310 MW this year.

Coal Sourcing
So far, the 600 MW capacity is the single largest unit commissioned in Madhya Pradesh. The plant will use both imported and domestic coal sourced from Coal India’s e-auction.

Essar Power received stage-1 forest clearance for the Mahan coal block in October. In the interim, the company has made an application for tapering coal linkage allocation from Coal India.

Naresh Nayyar, Chief Executive Officer, said the company has tripled its generation capacity over the past couple of years.

“Our focus now, is to develop the Mahan coal block which will provide a low-cost fuel source for the power plant, placing it among the lowest cost power generators in India,” he said.

So Far, So Good
In June, Essar commissioned Salaya-I plant in Gujarat with 1,200 MW capacity, while the 510 MW Vadinar-P2 plant also in Gujarat went live in November. The plant provides power to Essar Oil’s Vadinar refinery. The coal-fired power generation is having a positive impact on the refining margins, the company said in a statement.

The Salaya and Mahan plant will sell the majority of their output to state electricity boards. The other six operational power plants are for captive use.

The captive plant of 2,110 MW are at Hazira (515 MW, gas fired) and Bhander (500 MW, gas fired) supplying the Essar Steel plant at Hazira, while Vadinar (120 MW, refinery residue, multifuel), Vadinar P1 (380 MW, gas fired) and Vadinar P2 (510 MW, coal fired) are captive to the Essar Oil refinery at Vadinar. The other, Algoma (85 MW, gas fired), is captive to the Essar Steel plant in Algoma, Canada.