Dabhol Power Station

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Dabhol Power Station
Dabhol Power Station is located in Maharashtra
Dabhol Power Station
Location of Dabhol Power Station in Maharashtra
Country India
Location Anjanwel, Ratnagiri district, Maharashtra
Coordinates 17°33′35″N 73°9′59″E / 17.55972°N 73.16639°E / 17.55972; 73.16639Coordinates: 17°33′35″N 73°9′59″E / 17.55972°N 73.16639°E / 17.55972; 73.16639
Status Operational
Commission date 2000
Owner(s) Ratnagiri Gas and Power
Thermal power station
Primary fuel LNG

Also see Dabhol Power Company and Enron Scandal

Dabhol Power Station is located near Anjanwel village in Ratnagiri district in Maharashtra, India, about 160 kilometres (99 mi) south of Mumbai. The power station was a built by the Dabhol Power Company (DPC), which was a joint venture of Enron, General Electric, Bechtel and Maharashtra Power Development Corporation.[1] At the start of its construction in 1992, the Dabhol power station was the biggest foreign investment in India. The plant was mired in controversies of corruption and malpractices involving Enron and people at the highest political levels India and the United States (Clinton and Bush Administration). [2]

History[edit]

Construction of the Dabhol Power Station was planned to be completed in two phases. The first phase was a 740MW unit to use naphtha as the fuel. Construction started in 1992 and finally completed in May 1999.[3] The next phase was 1700MW of units using liquefied natural gas (LNG) as fuel. At its height, the construction of the Dabhol power station employed 15,000 people.[4]

Controversies with Enron - building, pricing and operations[edit]

The power project ran into trouble due to the power purchase agreement between the DPC and the state's power utility, Maharashtra State Electricity Board (MSEB). The agreement negotiation lacked transparency, and details had not been made public.[5] In 2000, MSEB was paying DPC Rs. 4.67/kwh while the tariff that MSEB charged its customers was Rs. 1.89/kwh.[5]

Due to political controversies related to the high pricing of power from the station and allegations of corruption,[3] the construction and operation of the Dabhol power station was interrupted on several occasions even after it started operation in May 1999. In January 2001, the Maharashtra state government stopped paying the company due to the high cost of power charged by them. Subsequently, high level US Government officials including Colin Powell, Dick Cheney, Christina B.Rocca and Alan Larson tried to convince the Indian authorities to pay Enron and allow them to continue its operations at Dabhol.[2] However, in November 2001, due to the Enron bankruptcy and disputes between Enron's creditors and the Government of Maharashtra (GoM). The power plant was finally rehabilitated and taken over by Ratnagiri Gas and Power (RGPPL), which successfully revived and operates the plant.[6]

By 2001, there were a number of political controversies brewing over the power purchase agreement. The price paid by MSEB for power from the Dabhol station was over twice that from other power stations in the state.[3] With escalating tensions between MSEB, GoM and DPC, operation of Phase I and construction of Phase II came to a halt in May 2001. With the Enron bankruptcy, Enron's stake in DPC was bought out by GE and Bechtel.

The plant was moth-balled for 5 years, while the various claimants, including MSEB,Government of Maharashtra, GE, Bechtel, Indian banks and the Government of India, settled their disputes over payments.

In May 2006, after protracted negotiations, state-owned NTPC Limited and GAIL agreed to take over the power station. RGPPL was floated as a joint-venture between these two companies to own and operate the Dabhol power station.[6] However, the revival proved difficult due to 3 catstrophic breakdowns in the equipment supplied by GE.[7]

After repairs to the equipment, the power station resumed operations at 100% of its installed capacity of 1967 MW in 2010, however it has had to often stop operation due to losses and a lack of buyers for its expensive electricity.[8]

As of 2016, the power plant continues to operate at a loss, selling energy to the MSEDCL and Indian railways at a highly inflated rate. In 2015, it had a debt of Rs. 10,500 crore. In a bid to revive the loss making plant, in September 2015, the Company owning the power plant RGPPL was split into two separate Power and LNG entities, one to manage the power plant and the other to manage the import of LNG..[8]

References[edit]

  1. ^ "Case Study: Dabhol Power Company Limited". 2009-10-12. Retrieved 2011-11-01. 
  2. ^ a b "FACT SHEET - Background on Enron's Dabhol Power Project (22 February 2002)" (PDF). U.S. House of Representatives. Retrieved 25 October 2016.  |first1= missing |last1= in Authors list (help)
  3. ^ a b c "Enron's eight-year power struggle in India". Asia Times. 2001-01-18. Archived from the original on 2011-11-23. Retrieved 2011-11-01. 
  4. ^ Enron's Dabhol Power project is now a rusty ghost town
  5. ^ a b Bajaj, Vikas (2010-03-22). "India's Woes Reflected in Bid to Restart Old Plant". The New York Times. Retrieved 2011-11-01. 
  6. ^ a b "Home". Ratnagiri Gas and Power Private Limited. Retrieved 2011-11-01. 
  7. ^ Bajaj, Vikas (2010-03-22). "India's Woes Reflected in Bid to Restart Old Plant". The New York Times. 
  8. ^ a b "Dabhol power project to be split into two companies to revive plant". The Mint. 30 September 2015. Retrieved 28 October 2016.