Odisha may reject Vedanta's plea to use IPP power for smelter - State grid is currently getting 400-450 Mw from Sterlite's 2400 Mw plant
The Odisha government is unlikely to consider the plea of Vedanta Aluminium Ltd (VAL) to use power generated by Sterlite Energy Ltd, also a Vedanta Group firm, to run its smelter complex at Jharsuguda. The company had argued that since Odisha had turned power surplus, sparing 600 Mw out of Sterlite's 2400 Mw (4x600) coal-fired station could come to the rescue of its smelter lying idle for want of power. The state grid is currently getting 400-450 Mw from Sterlite's 2400 Mw plant and acceding to VAL's request would cut supply by 50%. "Vedanta had requested the government to allow conversion of its two 600 Mw units to CPP (captive power plants). But such an arrangement would cut power supply to state grid by up to 50%. Besides, the state government is not encouraging conversion of IPP (independent power producer) to CPP", said an official in the know of the matter.
VAL's 1.25 million tonne per annum (mtpa) aluminium smelter set up as a sector specific Special Economic Zone (SEZ) at Jharsuguda is lying idle presently for want of power. Sterlite Energy, an IPP, runs 2,400 Mw coal-fired station at Bhurkamunda near Jharsuguda. "We have set up our aluminium smelter in Jharsuguda in line with the state's SEZ policy 2003 and are awaiting approval. We will be very pleased if approval can be granted immediately. The company also requests the government to allow use of 600 Mw power plant to run our smelter for value addition which is lying idle," Vedanta Resources chairman Anil Agarwal had written to chief minister Naveen Patnaik. The company had recently sought extension of SEZ benefits for its aluminium smelter project at Jharsuguda.
VAL has already invested Rs 12,000 crore on the smelter complex. The commissioning of VAL's multi-product SEZ at Jharsuguda has been delayed considerably due to non-finalisation of the state specific SEZ policy. Due to lack of the policy, various government departments were unable to extend the SEZ benefits. Commissioning of the SEZ facility promised to boost the local economy by generating business potential worth Rs 15,000 crore every year. Direct and indirect employment opportunities for nearly 12,000 persons are set to be created.
The facility is also expected to develop local infrastructure besides boosting numerous small scale enterprises. Since the Odisha government has granted its concurrence to grant the SEZ status to the smelter plant, VAL had pointed out earlier that the state SEZ policy should be applicable to the establishment. The company had also suggested that developing and setting up of downstream industries in the area adjoining to the smelter should be made mandatory.