India need not follow the development strategies dictated by Moody's etc. India's social fabric is different from other countries. Our development should be in line with the system evolved over many centuries. To break it is suicidal.
This deal was imposed on us. It is not a well thought out deal. For some it is. How does it influence the system now when the energy from the deal will flow only after a decade at a huge cost?
The terms of projects etc are NEGOTIATED during the year long visits (ninety times) by our big boss. 20000 MW target can not be achieved in ten years unless unconventional methods are followed. Most probably prefabricated and BOT method will be adopted financed of course by foreign loans. The whole management will be under the control of the company. All senior jobs (appx 300) will be for foreigners with luxury perks ($5000 – $10000 pm) prevailing in foreign countries boosting the over all cost. Most tools & plants and materials will be from abroad even if they are available here. There are clauses in the terms negotiated limiting India's interference. Further there is a clause arranging a separate channel in RBI (refer RBI governor's selection) for remittance abroad from these projects. Heavy foreign remittances and loan payments will add up the total cost making the unit cost unbearable. Refer ENRON project. Learn from experience!!
RE:Do not break the system developed over millioniums.
by Gopal on Aug 05, 2008 04:30 AM Permalink
Have a cursory view of the Dabhol plant (ENRON) As per the PPA (1993) the MSEB was to take 90% of the power generated. Also 16% profit was allowed. The unit price and profit was tied to dollar terms. So it did take care of the inflation. The project was completed in 1999. The Dabhol company projected energy cost of Rs2.65 per kwh in 1993. By the end of 2000 the unit price rose to Rs7/80 per kwh. I do not know the present rate. Any one can furnish?
Total cost of Dabhol was max. Rs10,000 crores. Max inflow of foeign exchange was Rs6000 crores. The foreign exchange out-flow was a staggering 100,000 cores. How it happened? A research will bring out the truth.
We can just imagine the HORSE TDADING that would follow in the $100 Billion projects that follow the N-deal. There was regular change of government in Maharashtra every five years. Similarly we can expect a change in the centre. They are well-versed in the horse-trading that is to be undertaken in India. Also the modus-operandi. Beware , Indians!!!
RE:Do not break the system developed over millioniums.
by Sandeep on Aug 05, 2008 05:10 AM Permalink
Dear Gopal,
Enron project when it came online started billing MSEB at Rs8.00/kwh which was very high and MSEB could not afford to pay thus the project fell through. Part of the problem was Naptha fuel was very expensive, other part was promoters were greedy(Enron folks are resting in jail). Now it is a gas based plant, and supplies at Rs 3.00/ kwh.
However, there is a shortage of gas and so it can not operate at full capacity either.
So you see why Nuclear fuel has to be resorted to? Nuclear is about same cost as Gas based plants.
RE:Do not break the system developed over millioniums.
by Sandeep on Aug 05, 2008 06:39 AM Permalink
The point I was trying to make is that Natural gas based plants are not feasible solutions for India.
RE:Do not break the system developed over millioniums.
by Sandeep on Aug 05, 2008 05:52 AM Permalink
Whether it will be BOT model or Private Industries will be allowed entry is yet to be known.
I doubt it will be Enron like model where foreign company is almost sole stakeholder.
RE:Do not break the system developed over millioniums.
by Gopal on Aug 05, 2008 10:04 AM Permalink
Dear Sandeep The cost escalation was due to remittances made -100,000 crores and other malpractices. Needless to say anything about Enron Chairman DR.Kenneth Lay, CEO Jeffrey Skilling. They are in jail. You are bit silent about the second part. Let us be watchful in the nuclear stations which MAY come by the deal. The unit price is reduced because of state's subsidy as decided in a negotiation. It is not the actual cost.
RE:Do not break the system developed over millioniums.
by Sandeep on Aug 05, 2008 01:01 PM Permalink
I am not sure what you mean when you say cost escalation was due to remittances. Maybe you mean they wanted to remit huge profits, which then ties into greed of Enron as a company which went bust in US also due to greed factor.
It is possible, they get gas at subsidized rates and hence are managing at approx Rs3.00 per unit. But note, the fuel they wanted to use originally was Naptha and they can still not produce electricity with that fuel at reasonable costs. Naptha unit was pretty much shut..
Second part is a bit of hypothesis at this point. I don't think foreign companies will be running the plants. They will needless be importing the reactors since the third generation reactors are much quicker to setup(~4 years) and easier to maintain etc which lead to cheaper electricity. Note, when EU did a comparison some time back, they found Nuclear energy was less than oil/gas based and competitive to coal if thermal plant was not based very near to mines. Anyways, I do agree that implementation of this is something which should be watched closely by everyone.
RE:Do not break the system developed over millioniums.
by Gopal on Aug 06, 2008 04:05 AM Permalink
You are silent about expected shortage of Uranium and price increase. Also the decommissioning cost. We should not put a burden on the next generation for the energy we use!!
As per the 1993 PPA the tariff structure is: Two part tariff- Capacity charge plus energy charge Capacity charge includes: Debt service, return on equity and fixed O&M charge-influenced by inflation Energy charge includes: LNG related cost, shipping cost and Variable O&M cost-influenced by fuel cost and import duty. It allows for 16% profit and projected to run 90% of year. The MSEB stopped power draw because of the high cost per unit. Congress and BJP govt are very much interested to keep the station running. They arranged MANY RESTRUCTURING to sell the energy at Rs2.30 per kwh. A GoM was authorised to handle the issue, SUITABLY. Even the PM directed state govt recently to intervene to handle the issue. GE (also the beneficiary of N-deal) does not cooperate with Ratnagiri Gas and Power Co to run the machines well. The management is not happy with GE at all. They just want to create shortage of power to speed up the N-deal.
EU made comparison. But they do not encourage nuclear power!! Then why should India go for that?
RE:Do not break the system developed over millioniums.
by Sandeep on Aug 07, 2008 12:03 PM Permalink
Ah, so now you move from EU not encouraging it to US estimate of waste disposal. Would you agree nuclear option if current US presidents/or future candidates were still supporting nuclear power?
RE:Do not break the system developed over millioniums.
by Sandeep on Aug 06, 2008 01:07 PM Permalink
There is no expected shortage of Uranium at this point. Also current estimates are for uranium to last 80-100 years atleast without re-processing of fuel. Neither is Uranium projected to increase in price more than other non-renewable resources.
You are again off to hypothesizing when you talk about GE not supporting etc. The reason it can not run at full capacity is they have not been able to source enough gas at good prices.
EU is now encouraging nuclear power. They recently said: "The nuclear industry has made considerable investments since 1997. The EU recognises the importance of maintaining a technological lead in the field of nuclear power and supports the further development of the most advanced framework for nuclear energy, including non-proliferation, waste management and decommissioning. "
Now that EU is supporting it, do you agree Nuclear power is an attractive alternative? Or are you too blinded by propaganda material to see reality and do even basic research on your own?
