Mukesh Ambani's Reliance Industries Ltd may be one of the biggest producers of natural gas in the country, but its power foray is likely to be coal or renewable energy based. The company is planning to not only bid for ultra mega power projects but also go in for acquisition of the power plants, said industry sources.
RIL is likely to bid for a 4,000- Mw Surguja UMPP coming up in Chhattisgarh and a similar project in Bedabahal in Orissa. An RIL spokesperson declined to comment.
The ministry of power has already issued Requests for Qualification for the Surguja project and the Bedabahal project, with a July 5 and July 30 deadline, respectively.
Mukesh Ambani's younger brother Anil Ambani's power generation company, Reliance Power, will not be able to bid for these UMPPs as the government has put a limit of three UMPPs per company. Reliance Power had earlier bagged the Sasan, Krishnapatnam and Tilaiya UMPPs.
Bidding for UMPPs will be a strategic move for RIL to create big-scale power generation capacity, said industry observers. Mukesh Ambani missed out on the power sector because of non-compete agreements with his younger brother following a family split in 2005.
The brothers entered into a new family agreement a month ago, which removed the earlier barrier of non-competition in each other's businesses. By the clauses in the new family agreement, RIL cannot set up gas-based power plants until March 31, 2022.
Another option before the elder brother to catch the power bus will be to acquire projects under construction. Many standalone power projects ranging from 300 Mw to 1,800 Mw are coming up in the country, promoted by even non-power sector players. Such projects will be much faster to develop, since a new coal-fired power plant takes about three years to come up besides involving problems like land acquisition.
"If required, RIL has the capabilities to set up a new big power plant in less than three years, as it has land in many areas like Jamnagar and has the technical knowhow and in-house talent," said an industry source.
RIL already operates a 1,000-Mw power plant to run its refineries in Jamnagar. Though the company has not recruited a separate team for its power venture, it would be easy to quickly create an internal team of experts, they noted.
RIL is also looking at solar energy and other renewable energy sources like wind and biomass as a major investment area in the future. The company has already forayed into solar energy through Reliance Solar, a subsidiary.
This division is developing and offering a range of products, systems and solutions - from solar lanterns, home lighting, street lighting, water purification, refrigeration systems and solar air conditioners. The company is also planning to set up a semiconductor wafer fabrication plant and solar PV module unit.
Power generation has become a lucrative destination for India's corporate sector, following the opening up of the sector for private players through the Electricity Act, 2003.
Almost all major corporate houses in the country, including Tata Power, Reliance Power, Adani, OP Jindal and Sajjan Jindal groups, Essar, GMR, Lanco Infratech and Indiabulls, have made big strides in the new emerging power generation business.
The government has set a target of adding over 200,000 Mw of additional power generation before the end of the 12th Five-Year Plan in 2017.
