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30 companies vie to turn Delhi's waste into power

January 23, 2008 12:01 IST

When 30 companies, including the who's who of the power sector, queue up to invest in a waste-to-energy plant, one thing is clear: there is money to be made.

Or companies like Tata Power, GMR Energy, Gammon Infrastructure and GVK Power would not be in the fray for this first-of-its-kind project in Delhi aimed at generating about 16 Mw of power from waste.

Instead of burning coal or gas to run the power plant, the plan is to use waste as fuel. The waste will be delivered "free" by the Municipal Corporation of Delhi and the New Delhi Municipal Council to the company that bags the project.

The waste would include all kinds of refuse - bio-degradable, non-degradable, recyclable, non-recyclable and even broken glass. This mixed waste will undergo a host of mechanical and thermal processes to flush out the combustible elements. This refuse-derived fuel or RDF will be burnt in a boiler to generate power.

A lot of waste is generated by the 14 million or so residents of the city - the volume being anywhere between 6,000 and 8,000 tonnes per day. The situation is so severe that even the landfills are running out of capacity.

The power plant will use about a third of the daily waste of the city. However, at a project cost of about Rs 175 crore (Rs 1.75 billion), the capital investment per Mw of power is almost Rs 11 crore (Rs 110 million). In contrast, a typical coal-powered plant can be set up at about Rs 4 crore (Rs 40 million) per Mw.

While the capex for a waste-based power plant is high, the fuel cost is almost zero, and this would make the power generated from the plant not too expensive.

The transmission cost is also expected to be low, since the project will be located within the city - across 18 acres of land in Okhla and Timarpur. And then there is the upside from carbon credits, which this project is eligible for.

However, since the project will be awarded through tariff-based competitive bidding, the cost of power will only be known once the bids are in on Thursday (January 24).

"Construction is expected to start by April 2008," says an official of IL&FS Infrastructure Development Corporation Ltd, which has, on behalf of the municipalities, prepared the blueprint of the waste-to-energy build, own, operate and transfer project.

In fact, it is one of the few "cooked" projects, which are up for bidding in the country.

The project will be ready for financial closure immediately upon award, since the consultant has secured a host of clearances and permits to give comfort to the bidders.

The estimated construction period of the project, which has already been appraised and even managed an in-principle sanction for funding by agencies like the Indian Renewable Energy Development Agency and Housing and Urban Development Corporation, is two years.

While there are similar projects in states like Andhra Pradesh, the challenge now would be to replicate this model across other cities in the country. After all, who can argue over the waste-to-energy-to-money concept!

Top firms in the race:

  • Tata power
  • GMR Energy
  • GVK Power
  • BILT Power
  • Jindal Urban Infrastructure
  • Maytas Infra Ltd
  • Essel Infraprojects Ltd
  • Ambuja Cements Ltd
  • Gammon Infrastructure
  • Ramky Enviro Engineers
Vandana Gombar in New Delhi