Konaseema Combined Cycle Power Plant

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In February 2004, Konaseema EPS Oakwell Power Limited (KEOPL), an independent power producer promoted by the local Hyderabad based VBC group, achieved financial closure for the long awaited 445 MW combined cycle power plant in Konaseema, East Godavari District in Andhra Pradesh. The roots of the Konaseema power plant lies in an effort undertaken by the Government of Andhra Pradesh (GoAP) and erstwhile Andhra Pradesh State Electricity Board (APSEB) to establish short gestation power stations to alleviate the power shortage in the state. In 1995, APSEB conducted a global tender on tariff basis and awarded eight projects to six developers for a total capacity of 1635 MW. EPS Oakwell Power Limited was one of the projects awarded by APSEB but it did not have the necessary natural gas allocation. EPS Oakwell Power Limited decided to merge with Konaseema power project, which had the fuel allocation but did not have a sanctioned power project. The combined project was implemented by KEOPL. The power generated from Konaseeman plant was supplied to the Transmission Corporation of Andhra Pradesh (APTRANSCO). In November 2003, KEOPL signed the power purchase agreement with APTRANSCO for a period of fifteen years from the project’s commercial operation date. APTRANSCO was created after GoAP initiated a comprehensive power sector reform in 1998 and functionally unbundled APSEB into one generation company, one transmission company (APTRANSCO) and four distribution companies. During the transition period and as of April 2005, APTRANSCO was operating under a single buyer model and procured power from generation companies for further sale to distribution companies. The project required 2.0 million cubic meters per day of natural gas (MSCMD). KEOPL has entered into a natural gas supply agreement with Gas Authority of India Ltd, and has a firm natural gas allocation of 1.6 million cubic meters per day and a fall back allocation of 0.4 million cubic meters per day. The project was estimated to cost Rs 138,300 lakhs (US$ 308 million) and achieved financial close in March 2004. A consortium of Larsen and Toubro, Seimens AG and Russian Power Machines (PM)/ (LMZ) was the EPC contractor for the Konaseema project. Seimens supplied 2 gas turbines, and PM/LMZ supplied the steam turbine and generators for the power plant. The plant was expected to be commissioned in 2006.