Essar Energy synchronises Vadinar P2 unit 1 to the grid

MUMBAI: Essar Energy today said the first of the two 255 MW units at its Vadinar Phase 2 (P2) power generation project in Gujarat has been synchronised with the transmission grid.

The coal-fired Vadinar P2 project, with 510 MW capacity, is one of three power plants being completed by Essar Energy during 2012, the company said in a statement.

The 1,200 MW Salaya I project in Gujarat has already been commissioned and is commercially operational, while the 1,200 MW Mahan I project in Madhya Pradesh is expected to be synchronised shortly, it said.

These three projects will take Essar's total installed capacity to 4,510 MW by 2012.

Most of the power generated by Vadinar P2 will be sold to Essar Oil's refinery at Vadinar, which will help improve margins at the oil refinery given the relatively lower cost of coal-fired generation.

"The synchronisation of unit 1 at Vadinar P2 is another step forward for our power business and when it is commercially operational, this project will also improve margins at the refinery," company's chief executive Naresh Nayyar said.

He further said that some power will also be sold to Essar Steel and some in the merchant market.