OREANDA-NEWS. January 16, 2013. Tata Power, India's largest integrated power player’s proposed modernisation of its 500MW Unit 6 at Trombay thermal power station, when operational, will supply power to customers of Mumbai, and this will be at substantially lower tariffs while duly meeting strict environment norms governing the Trombay facility.

The modernisation will use low sulphur, low ash imported coal and the target will be achieved through addition of the latest state-of-the-art coal firing equipment and installation of pollution control equipments, like 100 percent electro static precipitators and flue gas desulfurisation systems, to maintain emissions at current and controlled level. Thus, this modernisation will not result in any additional pollution / emission in Chembur, Mumbai, and its neighboring areas. Moreover, no additional water or any other resource is being sought to operate the modernised plant. Tata Power will be making an investment of approximately Rs1,174 crore for this modernisation.

S Padmanabhan, executive director Tata Power, said, “At Tata Power, we have always strived to provide affordable electricity to customers while maintaining our strong commitment to environment protection, hence we have proposed modernisation which will help reduce costs and ensure higher utilisation of capacity. Tata Power, as always, remains committed to providing clean and affordable power to its customers in Mumbai, like it has done for the last 100 years now.”

The proposed modernisation of Unit 6 has been necessitated by the unavailability of gas and spiraling oil prices, which has adversely affected electricity tariffs for consumers in Mumbai. The proposed modernisation will improve utilisation of full capacity of 500MW at best operating efficiency resulting in competitive, reliable and enhanced power supply availability. It will also reduce fuel cost and thus help lower tariffs for Tata Power customers in Mumbai. Tata Power has a 100-year-old track record and is making this change keeping in view interest of customers as oil and gas prices are expected to climb higher compared to coal.

The per unit cost of electricity from Unit 6 is estimated to come down to Rs4.48 (FY16) from the current cost of Rs8.50 per unit. This is a substantial reduction as cost of oil and spot gas is very high. The proposed modernisation of Unit 6 at Trombay will accrue two-fold benefit for consumers (i) it will ensure higher off-take and availability of reliable and uninterrupted power supply for Mumbai (ii) reduced fuel cost will bring down the tariffs in Mumbai.

This financial benefit of reduced cost of generation will be directly and fully passed on to the consumers in Mumbai in the form of lower tariffs. This reduction in cost is due to the lower price of coal as compared to oil.

The dire need for modernisation has risen due to unavailability of natural gas, which has resulted in Tata Power being dependent on an expensive fuel like oil to run its Unit 6. However, a shortage of low sulphur oil from local refineries and spiraling prices of imported oil and gas, have led to significant escalation in the absolute cost of power generation from Unit 6. Consequently, this 500MW unit, which was previously operating at a best operating PLF at 80 percent, is now operating at around 50 percent PLF for the past two years. This has necessitated modernisation, thus ensuring additional option of coal firing for optimum utilisation of the existing power generation infrastructure at best operational efficiency.