Insistence on dollar payments delays ocean power project

A US firm proposing to set up a project off the Tamil Nadu coast that will supply electricity and potable water from the ocean wants to be paid in dollars. Officials say this is equivalent to importing electricity.

 
Published: Saturday 04 July 2015

A SQUABBLE over foreign exchange is holding up India's first bid to commercially harness energy from the ocean. The government has agreed, in principle, to allow Sea Solar Power Corp -- a private US firm -- to set up a 100 mw plant off the Tamil Nadu coast using ocean thermal energy conversion (OTEC) technology. Sea Solar will put up $ 250 million for the project, but insists on being paid in dollars for the power generated. The Tamil Nadu Electricity Board, which will buy the power and supply it, is negotiating for payment in Indian rupees.
When, and if, the payment tangle is resolved, the OTEC plant will come up 40 km off Kulasekarapatnam near Tiruchendur. OTEC technology utilises the temperature difference between surface and deep-sea water. The temperature on the surface is normally about 28oC, whereas at a depth of 0.8-1.0 km, it is rarely above 5-7oC.
In this system, called the open cycle system, warm seawater is "flash evaporated" in a vacuum chamber and the resultant vapour drives a low-pressure turbine that is connected to a generator. The colder water is used to condense the steam, during which it gets desalinated into potable water. In the proposed plant, 8250 cum of desalinated water is expected to be produced every minute. (How much does Delhi use per minute?)

Free of problems
Experts say OTEC is free of the problems that plague other energy supply systems. The average temperature difference of 20oC in the ocean ensures continuous power supply, unlike reservoirs of hydro-electric plants that sometimes run dry. Another benefit, according to M Ravindran of the ocean energy cell at the Indian Institute of Technology (IIT) in Madras, is that the cold, nutrient-rich seawater can be used for aquaculture.
Experts at IIT say, this technology has great potential in India. Besides the floating-platform model that Sea Solar proposes to put up, on-shore models that draw in warm and cold sea water through two pipes can be set up. India's 3,000-km tropical coastline and several off-shore islands present a number of appropriate OTEC plant sites. Ravindran says OTEC has a potential installed capacity of 50,000 mw in India. The technology could be a cost-effective option for power generation in remote islands. A study by the Metallurgical and Engineering Consultants of India found that a one-mw OTEC plant in the Lakshadweep islands in 1985 could have produced electricity at Rs 3.72 per unit -- half the cost of power from a diesel generator.

But the payment issue is hampering progress on this continuous, pollution-free and renewable energy source. Sea Solar will put up the off-shore plant and lay the transmission lines to the shore, and has guaranteed power supply for 20 years. The TNEB is not complaining about the price -- seven US cents (about Rs 2) per unit -- which is not considered very high. An official of the Tamil Nadu Energy Development Agency, the unit coordinating work on the proposal, said, "They [Sea Solar officials] say that since their investment is in dollars, they would like to be paid in the same currency. For us, it is equivalent to importing electricity."
But, he added, "Only if we permit the plant to be set up will we get the experience to go further."

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