The first of two new Indian power production plants due to be completed this year by PSEG Global has commenced commercial operations, it was announced yesterday. The new facility is located in the coastal town of Pillai Perumalnallur (PPN) in the Southern Indian state of Tamil Nadu. The PPN project is the first in India to have reached financial closure without the assistance of a government guarantee.

An international consortium led by PSEG Global, Marubeni Corporation and El Paso, together with the Apollo Group of India, are the principal owners of the plant. PSEG Global will oversee operations and maintenance of the plant, while Marubeni oversaw the plant’s construction.

Under a Power Purchase Agreement, the Tamil Nadu Electricity Board will purchase the entire output of the plant. The 330 MW combined cycle plant is currently being run on naphtha and will switch to a mixture of naphtha and natural gas as offshore gas wells are completed.

PSEG Global also expects to bring online this summer a 220 MW naphtha-fired, barge mounted combined cycle plant in Mangalore, India.

New facilities such as those being brought on stream by PSEG are critical to India. The country faces a constant shortage of electricity supply against demand, with a peaking shortage of 18 per cent and an energy shortage of about 12 per cent. With a total area of 3.2 million km2, a rapidly growing population that last year passed the 1 billion mark and a growing economy, a major concern of India is how to meet increasing energy demand. In spite of a significant growth in power generation since independence, the installed capacity stands at 100 000 MW today.

The challenge is enormous, with experts’ reports indicating that India’s power sector needs to add 58 000 MW by 2003, or 19 000 MW per year, which translates into a required investment of $60 billion in generation capacity alone.

PSEG Global develops, acquires, owns, operates and invests in independent power generation and distribution facilities throughout the world. It owns interests in seven distribution companies serving an excess of 3 million customers and currently has 3200 MW of installed generation capacity with an additional 3300 MW under construction. The company operates through a worldwide network of four regional centres with its business operations covering India and Oman being based in Chennai, India.