A high-tech power station foreign companies are building in Maharashtra is being touted as the "perfect solution" to its anticipated electricity shortfall. The mystery is that the agreement and the environment impact assessment are under wraps
For a few units more
ON JULY 17, the construction of India's largest power station and one of the world's biggest private sector power plants would have begun. The ultra-modern, 2,015-mw plant in Dabhol, 170 km south of Bombay in Maharashtra's Ratnagiri district, is being pitched as the "most efficient solution" to the looming power crisis in this industrialised state.
Enron Development Corp, the US-based multinational which was invited by the Union government in 1992 to set up the plant, is promoting the project along with General Electric (GE) and Bechtel Enterprises Inc. And despite apprehensions about the project's high cost, efficiency claims and environmental impact, Enron has managed to evade any techno-economic or environmental damage assessment of the project.
An Enron official boasts, "The combined cycle generation system that will be installed in Dabhol is the latest, and has a proven efficiency record. In fact, before the plant comes up in Maharashtra, there would be no such unit even in the US."
On the face of it, the 2-stage project is undoubtedly high-tech. In the first stage, scheduled to be operational in early 1996, diesel will be used to generate 695 mw. In the second phase, due to begin late 1997, liquefied natural gas (LNG) will be utilised to generate 1,320 mw. The use of 2 firing fuels -- diesel and LNG -- is enabled by state-of-the-art GE 9FA combustion turbines, which can use either fuel without being shut down.
The GE 9FA also has a high firing temperature. A senior engineer with the Dabhol Power Company (DPC), the Indian firm that will own and operate the plant, explains, "The most crucial aspect of a turbine is the daily operation temperature it can withstand." In combined cycle generation plants, LNG is fired inside the gas turbines and the heat generated is used to produce steam, which runs a series of steam turbines. The shafts in the steam turbines are attached to a generator which runs at a speed of 3,000 rpm."
The firing temperature of the 9FA turbine is 1,260oC. This gives it a higher specific power, which is the power produced by the turbine per unit of airflow. The higher the specific power, the greater the thermal efficiency. In addition, the high exhaust temperature of 538-593oC transfers heat from the exhaust gas to the steam with a minimum temperature difference.
But these claims aren't being swallowed by economists and public sector undertakings like Bharat Heavy Electricals Ltd (BHEL), which till now had monopolised the supply of power equipment. Says K Ashok Rao, president of the National Confederation of Officers' Associations of Central Public Sector Undertakings, "The state-of-the-art tag is all humbug. BHEL, which has extensive experience in setting up power plants and manufacturing turbines, was not given a chance to bid for the plant. After all, BHEL makes turbines under licence from GE as well as Siemens."
V G Kulkarni, director of the Homi Bhabha Centre for Science Education, is all agreement, saying, "Against all norms, Enron was 'invited' by the government...there was no bidding. The government argued untenably that this was a deal without precedent and thus the contract was awarded on a negotiated basis."
Enron officials give short shrift to BHEL's claim that it has the ability to provide turbines of the GE 9FA type within a short period. An official of the company categorically stated that it was not impressed with BHEL's track record, "I am quite sure GE does not part with its latest technology to BHEL -- how else would developed nations guard their commercial interests?" the official added
Rao challenges the project on other grounds. "Modern and improved machinery is all about low operation costs and high efficiency," he says. "The technology that Enron is acquiring from GE fails on both counts. The project was handed over to Enron without checking on the best cost-benefit balance."
The high cost of the project -- Rs 9,053 crore ($2.82 billion) -- has indeed raised the eyebrows of economists who feel the cost of foreign investment projects should be low because of the recession in the West.
Kulkarni, who also led a fact-finding committee on the Dabhol power plant, which recently submitted its report, says, "For a 1,905 mw project (2,105 mw is the peaking capacity) costing Rs 9,053 crore, it means the cost of generating power would be Rs 4.75 crore per mw." In comparison, Kulkarni says, the cost per mw in the gas-based combined cycle projects in Uran in Maharashtra and Kawas in Gujarat is just Rs 1.16 crore and Rs 2.32 crore, respectively. Rao is also critical of the efficiency claim of the plant. He says, "How can they say their plant is more efficient when the gas or fuel they will use to produce a unit of electricity is 2.5 ml, compared to 0.87 ml by the National Thermal Power Corp?"
Technology, cost and efficiency matters apart, experts believe that power that will be generated by the plant in 1998 will exceed demand. This prospect could discourage energy conservation and demand-side management. Says B Sudhakara Reddy of the Indira Gandhi Institute for Development Research (IGIDR) in Bombay, "If demand-side management schemes are initiated, there would be no need for so much power -- smaller, &I-low-investment plants will suffice. Also, existing plants will lose incentive to improve efficiency."
Rao is apprehensive about the people of a fuel imbalance. He says, "DPC will have to import 3 million tonnes of oil equivalent annually to run the plant. Considering that petroleum import is one of the biggest causes of adverse balance of payments, such an option should have been handled carefully. This also means gas from the Indian coast won't be used. And, because MSEB (Maharashtra State Electricity Board) is tied to buy a specific amount of load every day during off-peak periods, it would have to back down some of its low-cost, coal-based plants."
The Enron representative agreed with this and conceded that the Teesside plant in northeast England Enron had set up last year caused similar problems.
Doubts have been voiced about the impact on the delicate environment of the Konkan region. Debi Goenka of the Bombay Environment Action Group says, "The project will adversely affect fishing, farming, water resources and the environment in the Konkan area. Also, heat from the plant will raise the temperature of the area considerably, affecting mango cultivation."
The local people are perturbed over the arrival of a power plant in their neighbourhood. Says Dattaji Vandkar, sarpanch of Veldur villager in Dabhol area, "The state government never consulted us. No one has tried to tell us what is happening. Any pollution from the plant would affect our livelihood." A powerful people's movement is brewing around Dabhol and the opposition Bharatiya Janata Party plans to file a public interest litigation to stop moves for implementing the second phase of the project.
Rashmi Mayur of the Bombay-based Urban Development Institute says that the people will soon be forced to abandon their traditional methods of livelihood. "The problem is not just in terms of pollution from the plant -- it could also be from the industries that would be drawn to the power-surplus area of Dabhol and Ratnagiri. And that is what no one has tried to assess," he says.
Attempts to assess the project are blocked by the Maharashtra government and the Enron-GE-Bechtel consortium. By keeping the power purchase agreement (PPA) and the environment impact assessment (EIA) report under wraps, both the economic and environmental cost evaluation are being avoided.
DPC and Enron representatives dismiss environmental concerns by claiming the plant will have sophisticated environment protection measures. In addition, they say, the LNG to be used has 80 per cent less nitrogen dioxide, 60 per cent less carbon dioxide and virtually no sulphur dioxide. However, there is no mention of emissions in the first phase, when diesel will be used, except for a summary claim that the EIA report states there will be no effect.
Even the plant's use of sea water could affect sea life. The plant will draw up to 8,000 cubic metres of water daily, which will be discharged back into the sea after use in the cooling section. Though Enron spokesperson Vrinda Walavalkar insists the temperature of the discharged water "will never be more than 5 per cent higher than normal", experts discount this claim.
Says S D Paranjpe of the fisheries department of the Konkan Krishi Vidyapeeth in Ratnagiri, "This is far-fetched. No proper study has been carried out. During the monsoon, when fresh water is warmer than sea water, fishes and shrimps move to the coast for spawning. But if the water near the coast remains warm all round the year, they might get the wrong signals. New factories in the area may also end up dumping their waste into the sea."
The Enron representative claims, "We are depending on the National Oceanographic Institute to identify the intake and outflow points." But B Dattatrya of the Vidyapeeth counters: "If they are yet to identify the intake and outflow points, how can they have carried out an EIA?"
Similar concern has been expressed about the large amounts of LNG, a highly inflammable cryogenic fuel, that will be piped from the jetty to the plant. DPC engineers claim vapour-detection systems coupled with automatic locking mechanisms and a suppression system will be installed to take care of leaks. But it is not clear whether the impact of escaping gas has been carried out.
Down To Earth tried to obtain the EIA report from the DPC, the Maharashtra department of environment, state minister for environment Arun Gujrati, the state pollution control board and even the ministry of environment and forest, only to be told by all of them that it is confidential. This in spite of a notification in January this year that EIAs would be provided for environment groups.
That the Union government is pampering Enron is quite evident (see box). It has even pledged to stand guarantor should MSEB fail to pay Enron for the power supplied to it. But A Mastan, the sarpanch of Anjanwal village in the area, perceives a little more: "The interests of the company have been taken care of, but whether that of the public also figures in the scheme of things is not clear."
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