Is Baghliar-III project economically viable?

It’s just an idea: PDD
Pre-feasibility report ready: PDC

Chief Minister Omar Abdullah’s announcement notwithstanding, the proposal to set up Baghliar-III hydropower project on Chenab River in Jammu would require undertaking an in-depth study to ascertain the economic viability of the project, officials said.
Chairing 70th meeting of board of directors of the State Power Development Corporation, Chief Minister Omar Abdullah last Wednesday asked the Corporation to immediately start work for ascertaining feasibility of Baghliar-III. Omar who holds power portfolio is also the chairman of the Corporation which owns 21 hydropower projects in the state sector.
A senior official in the Power Development Department (PDD) said as per the pre-feasibility report the idea is to setup 400-MW hydropower project in the state costing around Rs 4200 crores.
“But the proposal has given rise to many tricky questions which need to be analyzed thoroughly before arriving at any decision,” he said. 
Elaborating the official said the concern was that owing to less water discharge in the basin during “lean period” the proposed project would generate energy for a little over three months during a year.
The 450-MW Baghliar –I which was commissioned by former Prime Minister Manmohan Singh in 2008 generates energy to the full capacity for nearly six months and then the power generation dips – it reaches minimum of 150-MW from December to February – owing to drastic dip in discharge in the Chenab basin.
Similarly the 450-MW Baghliar-II scheduled for commissioning in September next year would be generating energy to the maximum capacity for less duration compared to Phase-I. 
Another PDD official said apart from generation issues, the tariff on the energy generated from Phase-III would be on the much higher side. “As per the preliminary estimates the average tariff will be more than seven rupees from the second year of generation while the rates would be enormously high for the first year. Who will buy this energy at such enormous rates?” the official said.
He said the “plant load factor” for the proposed project would be as low as 20 percent to 25 percent which is much below the set norms of 35 percent specified by the Central Electricity Authority (CEA). Plant load factor is a measure of average capacity utilization. A power plant is usually less efficient at low load factor which can result from non-availability of fuel (water in case of hydropower plants) and technical reasons.  
The setting up of the proposed project would require constructing separate “intake and head works” apart from the tunnel for diverting the water for energy generation.
These works for both Baghliar-I and II have been set up on the left bank of the dam while as the new works for Baghliar-III have to be taken up on the right side of the dam.
All these details would be the part of the final Detailed Project Report (DPR), the official said. “It will determine the generation cost per unit and whether the full hydrology from the Baghliar-II could be utilized for third phase. It will also enumerate the details like economic viability of the project,” the official said.
“The Government will have to seriously ponder over the fact that whether the project will be techno-economically viable. Besides, who will execute the project? Whether a new company will be hired?” the official asked.
Principal Secretary PDD, AK Mehta said the construction of the Baghliar-III was only an “idea” that came up for discussion during the PDC meeting.
He said every aspect would be analyzed prior to any forward movement vis-à-vis construction of the project. “It (Phase-III) will require clearance from the CEA and everything would be studied in detail,” Mehta said.
However, Mehta said he was not aware of any preliminary proposal being formulated for the construction of Baghliar-III. “Once any proposal comes up then only discussions will follow,” he said.
Managing Director PDC, MerajKakroo confirmed that a pre-feasibility report has been worked out for Baghliar-III. “Now we will focus on DPR,” he said.
At present J&K generates 760 MW from its power projects against the state-wide demand of over 2400 MW. The demand is expected to go up to 4217 MW by 2020. The Government is targeting 6256 MW generation by the end of the 13th five-year plan in the state sector alone.

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