Power India found that Brihanmumbai Electric Supply & Transport (BEST) is planning to enter into a long term Power Purchase Agreement (PPA) with Indiabulls Power Limited for 300 MW.
The move was considering the estimated exponential increase in power demand in Mumbai city over the next four-five years.
BEST is having a current PPA with Tata Power which was for 932 MW and at a tariff rate of Rs. 3.54 per unit is getting expired in 2016.
The BEST committee on Tuesday approved the signing of a power purchase agreement with Indiabulls Power for 300 megawatt. The firm will start supplying power from 2016.
As said by Mr. O. P. Gupta, General Manager, BEST said:
“Looking at the rate of development, we expect the power demand, catered by the BEST, to touch 1,300 megawatt by 2016. This will be the first time that we are buying power for the long term outside Tata Power”
The state government’s proposed Dharavi redevelopment plan and the construction of a business district in Wadala by the Mumbai Metropolitan Region Development Authority are likely to drive this growth in the demand for electricity.
“The projected demand for both these projects is 300 megawatts each, but it will take time for the projects to take shape and the demand to scale up. So we have gone with the assumption that put together, the demand from these two projects would be 300 megawatts by 2016,” Gupta said.
As per the agreement with Indiabulls, the company will supply power at Rs 3.42 per unit as the base price for 25 years.
BEST will start a fresh bidding process in 2013-end for a long-term supply of 1,000 megawatts, so that it has the capacity to cater to 1,300 megawatts by 2016.
“If we need power over and above that, we will go to the power exchange or buy it from the open market. However, the price in the open market is higher,” Gupta said.
Recently, BEST had purchased 50 megawatts for Rs 4.56 from the open market to make provisions for the peak demand during summer.
Meanwhile, the BEST has decided to hike salaries of its employees after discussions with the Sharad Rao-led union, which had called a flash strike last year.
As a result, BEST will shell out about Rs 350 crore as arrears from 2006 and bear incremental expenses of about Rs 140 to Rs 150 crore every year now on.
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