OREANDA-NEWS. February 18, 2011. The Steel Ministry has written to its petroleum and natural gas counterpart for allocating gas to SAIL's proposed 1,000-MW captive power project in Uttar Pradesh. The project, to be set up at the SAIL's Jagdishpur unit, erstwhile Malvika Steel , is part of the Maharatna company's plan to meet the burgeoning captive requirements in sync with increasing steel making capacity.

"The Steel Ministry has written to the Ministry of Petroleum and Natural Gas for allocation of gas to SAIL's Jagdishpur power plant. A Group of Minister will take a call on that," a source in the Steel Ministry told PTI. After getting the government's nod on allocation of gas, SAIL might look for a partner, having successful background of running gas-based power plants, to jointly develop the plant. Also, it may go solo on the project.

"We will like to have a partner which has the experience of running a gas-based power plants. What will be the joint venture's composition and other details will be worked out later," SAIL Chairman Chandra Shekhar Verma said.

"We are yet to decide whether to take a partner or not at all," he added. SAIL's steel plants at Bhilai, Durgapur, Bokaro, Rourkela and Burnpur are equipped with captive power plants which have a combined generation capacity of 1,327 MW.

Of this, 1,116 MW capacity is managed jointly with NTPC and DVC, while 211 MW capacity is fully-owned. SAIL has allocation of 1,107 MW from these power plants which supplied 70 per cent of its power requirement during FY'10.

The projected requirement of the company is 1,900 MW as the firm expands its steel making capacity to 23.46 million tonnes per annum (mtpa) by 2012-13 from 14.35 mtpa now. The power requirement of the state-owned firm is likely to further go up to 4,600 MW by 2020 when its installed steel making capacity is projected to reach to to 60 mtpa.

"We are ramping up our steel making capacity. Hence, we need to increase our power generation capacity as well. Our target is to source 100 per cent of our requirement through captive power plants," Verma said. During the third quarter of the current fiscal alone, its expenditure on power and fuel alone went up to Rs 887.61 crore from Rs 771.08 crore in the year-ago period.

A source in the company said that the SAIL might look for partners for jointly developing the power generation capacity to 4,600 MW on a later date.

SAIL will also try to meet part of its power requirement from renewable energy sources and is planning to add power plants based on solar energy in its steel plants. The company is also looking into opportunities in wind power generation.