India’s first Indo-Nepal joint venture has won its first major award and is making a huge impact on the lives of young Indians, but the country’s first-ever joint venture in the field of energy development is also doing it wrong.
The award, given by the government-owned energy ministry to the Nirmal Energy Development Company Limited (NEED), was given by a panel of eight senior officials of India’s three major energy firms – Sinopec, Larsen & Nielsen and Bharat Petroleum Corporation – and one eminent energy expert, Dr. N.G. Raman.
The NEED was created in 2016 to supply hydroelectricity to Indian consumers, and the panel said the project is in the early stages of development.
But, unlike the other two companies, NEED has been in talks with other energy giants to buy power from them.
NEED, the company, had acquired coal-based power plants from Coal India in 2013.
In an interview to NDTV on Thursday, NEER Managing Director Manoj Kumar said that the company was not yet ready to sell its power to India, but was in talks to buy it from them after the NEED-Sinopec project was awarded.
He said NEED had also been in discussions with other major energy players, such as the State Grid Corporation of India (SGCI) and NBP, to acquire power from these companies in the future.
The NEED and SGCI had already committed to buy the electricity from them in the next five years, Kumar said.
This is the first-time in India that two companies have jointly taken up the sale of power, and it will have a major impact on India’s energy security and the economy.
But there are a number of other issues that need to be addressed before a successful joint venture is formed.
“There is no clear structure in terms of the companies’ ownership structure,” Kumar said, adding that the NEER team will have to review all the details before deciding whether the company will be allowed to sell power.
The other issues with the joint venture include the fact that there is no agreement on the price for the power that will be purchased by NEED from the three companies.
The company said it will be paid at a fixed rate of about $1.40 per megawatt hour (MWh) over the life of the project.
In the first phase, it will buy power at a price of $1 per MWh.
The joint venture will also have to ensure that the power supplied to the public will not be diverted to private enterprises and the power companies will not take profits from the power generated.
In addition, Kumar admitted that there were not enough people in the NEES to manage the joint ventures.
“We have only three engineers.
In addition, we have not got enough staff, so we have to bring in additional personnel to manage and supervise the project,” he said.NEED is a subsidiary of SGCII, a state-owned power company.
NEER is an independent company with the right to sell the power to its customers, Kumar added.
The ministry of new and renewable energy had earlier announced a Rs 1,300-crore fund to support the NEERS-Sinos energy venture, but Kumar said it would not be available till all the conditions were met.
The government has been trying to promote the NEID-Sinoplac projects and is also giving its nod to the company for the development of the Narmada power project in Gujarat.
The government has also sanctioned an investment of Rs 4,200 crore for the project in order to encourage investment by other states in the country.