September 28, 2007 (Economic Times)- RIL proposed power projects may bring in unexpected bonanza. The gas-fired projects of 5,800 mega watt capacity will help the oil-to-retail giant earn carbon credits through application of clean development mechanism (CDM). Top RIL officials have met a delegation from Germany on Thursday for acquiring technology for CDM of the Kyoto Protocol. The German delegation led by Volkhard Riechmann, deputy secretary of energy, North Rhine-Westphalia state has presented documents on efficient power plants and renewable energy technology.
RIL officials also met senior officials from leading European power companies such as RWE Power, SMA Technologies, Southasia Consulting and Interessenverband Grubengas, said company sources.
While RIL officials refused to comment on the development. The CDM aims to attract investment for the climate-friendly projects, which emit minimum greenhouse gas. These types of projects can claim carbon credits.
The current global price for one tonne of carbon dioxide at the exchange hovers around $3.35. The price is expected to shoot up to $20 per tonne by 2010, said industry analysts. While the German CDM technology is known for reducing carbon from power plants.
RIL is planning to generate about 5,800 MW of electricity with an investment of nearly Rs 20,000 crore. If the company can cut the carbon emission by 20%, it can get huge revenue from the European markets through the sale of credits.
Moreover, it can use these credits for its future petroleum refining projects, which produce high amounts carbon, in India and abroad, said analysts.
RIL will set up two gas-based power plants of 1,000 MW each in Maharashtra. This would be in addition to the power plants proposed at RIL’s special economic zones. The company is setting up two power stations inside its SEZs in Jamnagar and Mumbai with a total capacity of 3,000 MW. The gas from KG basin will be used as feedstock, said sources.
The 1,000 MW gas-based station in Jamnagar is likely to be completed along with the proposed 33 million tonne per annum refinery in mid-2008. Another 2,000 MW will be generated by a gas-based power station in Mumbai which will be connected to the state grid. The two SEZs that the company plans in Navi Mumbai are expected to consume 1,100 MW and the rest will be sold to Maharashtra, said the sources.