Now, IndianOil to diversify into wind power generation
Mumbai   29-Jul-2008
IndianOil will diversify into wind power generation on the lines of Oil & Natural Gas Corporation (ONGC) and Bharat Petroleum Corporation (BPCL). The proposed project will cost Rs 131.66 crore. The full captive mode wind power project is expected to give an IRR of 11.85% on stand alone basis, taking into consideration the accelerated depreciation, income tax benefit under section 80 IA and clean development mechanism (CDM) benefits. IndianOil sources told FE, “IndianOil’s vision of being a major diversified, integrated energy company with a strong environment conscience and in view of the over dependence on imported crude makes it imperative for IndianOil to explore/diversify into alternative energy sources like wind power. It can be used for own consumption and marketed as well. IndianOil identified Gujarat, Rajasthan and Orissa for exploring the possibility of implementation of a pilot wind power project to start with. Finally, IndianOil zeroed in on Gujarat. Suzlon has won the bid for the development of 21 mw project.” The Energy and Resources Institute (TERI), which prepared a feasibility report for the proposed wind power project, completed the technical evaluation of the bids recommending disqualification of Vestas RRB bid for inadequacy and acceptance of Suzlon techno-commercial bid with the agreed modification to the tender. As per tender modifications, to safeguard the interest of IndianOil, Suzlon agreed to furnish the bank guarantees (BGs) against milestone payments. Bank Charges for such BG’s will be on IndianOil’s account subject to a maximum of Rs 15 lakh. The land will be leased to IndianOil till the land use is converted to Non Agricultural and it is transferred to IndianOil. IndianOil only will pay lease rent for one year. Wind power projects are eligible for benefits under the CDM projects. The improvement in IRR as a result of additional revenue from CDM is about 1.9% point.