Dabhol Power Company
Encyclopedia
The Dabhol Power Company was a company based in India
, formed to manage and operate the Dabhol Power Plant. The Dabhol plant was built through the combined effort of Enron
, GE
, and Bechtel
. GE provided the generating turbine
s to Dabhol, Bechtel constructed the physical plant, and Enron was charged with managing the project through Enron International.
to Multan
, in Pakistan
. Cost: about $2 billion. Also considered was a route from Iran to Multan which was seen as feasible due to Iran's huge oil and gas reserves. However, In 1996 when the Sanctions against Iran
were imposed, the FBI blocked the plan, and it was forcibly cancelled. A proposed 400 mile extension from Multan to New Delhi
would bring some of the gas into India's network of gas pipelines. Cost: $600 million.
A sea route from Gwadar
, Pakistan, to Dabhol, India, was never considered despite both locations being coastal towns.
for being complicit. On August 3, the Maharashtra ordered the project to be halted because of "lack of transparency, alleged padded costs, and environmental hazards." Construction ground to a halt. By then, Enron had invested about $300 million into the project.
, a fuel similar to kerosene
and gasoline
. Phase one would produce 740 megawatts and help stabilize the local transmission grid. The power plant's phase one project was started in 1992 and finally completed in two years behind schedule.
(LNG). The LNG infrastructure associated with the LNG Terminal at Dabhol was going to cost around $1 billion.
In 1996 when India's Congress Party
was no longer in power, the Indian government assessed the project as being excessively expensive and refused to pay for the plant and stopped construction. The Maharashtra State Electricity Board
(MSEB), the local state run utility, was required by contract to continue to pay Enron plant maintenance charges, even if no power was purchased from the plant. The MSEB determined that it could not afford to purchase the power (at Rs. 8 per unit kWh) charged by Enron. The plant operator was unable to find alternate customers for Dabhol power due to the absence of an open free market in the regulated structure of utilities in India. From 1996 until Enron's bankruptcy in 2001 the company tried to revive the project and spark interest in India's need for the power plant without success. The project was widely criticized for excess costs and deemed a white elephant
. Socialist groups cited the project as an example of corporate profiteering over public good.
Over the next year Enron reviewed its options. On February 23, 1996, Maharashtra and Enron announced a new agreement. Enron cut the price of the power by over 20 percent, cut total capital costs from $2.8 billion to $2.5 billion, and increased Dabhol's output from 2,015 megawatts to 2,184 megawatts. Both parties committed formally to develop the second phase. The first phase went online May 1999, almost two years behind schedule, and construction was started on phase two. Costs would now ultimately climb to $3 billion. Then everything came to halt. The MSEB refused to pay for all the power, and it became clear that getting the government to honor the guarantees would not be an easy task. Although Maharashtra still suffers from blackouts, it says it does not need and cannot afford Dabhol's power. India's energy sector still loses roughly $5 billion a year. Today, Dabhol, in which Enron had invested some $900 million, sits silent. This plant was taken over by Ratnagiri Gas and Power Private limited in July 2005.
supply. Qatar based RasGas Company Ltd. started supplying LNG to the plant in April 2007.
The Dabhol Power plant consists of 3 blocks, each consisting of two GE make frame 9 gas turbines and one GE steam turbine. Block 2 commissioning work and Gas turbine 2A trial runs started on 25 April 2007.
The Dabhol Power Plant Project is operational as of April 2009 with 900 MW RLNG
fired running capacity but there are problems due to non-availability of operational insurance, also the decision is largely dependent upon political developments in the country as well as performance of newly repaired rotors. As 1 each of the combined cycle generator unit (total 3) is under shutdown.
2. Interesting though non-precise case study on Dabhol from IIT Madras
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, formed to manage and operate the Dabhol Power Plant. The Dabhol plant was built through the combined effort of Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
, GE
General Electric
General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...
, and Bechtel
Bechtel
Bechtel Corporation is the largest engineering company in the United States, ranking as the 5th-largest privately owned company in the U.S...
. GE provided the generating turbine
Turbine
A turbine is a rotary engine that extracts energy from a fluid flow and converts it into useful work.The simplest turbines have one moving part, a rotor assembly, which is a shaft or drum with blades attached. Moving fluid acts on the blades, or the blades react to the flow, so that they move and...
s to Dabhol, Bechtel constructed the physical plant, and Enron was charged with managing the project through Enron International.
The infrastructure development
Starting in the mid 1990s, Unocal and its partners planned to build a 1,000 mile gas pipeline from TurkmenistanTurkmenistan
Turkmenistan , formerly also known as Turkmenia is one of the Turkic states in Central Asia. Until 1991, it was a constituent republic of the Soviet Union, the Turkmen Soviet Socialist Republic . Turkmenistan is one of the six independent Turkic states...
to Multan
Multan
Multan , is a city in the Punjab Province of Pakistan and capital of Multan District. It is located in the southern part of the province on the east bank of the Chenab River, more or less in the geographic centre of the country and about from Islamabad, from Lahore and from Karachi...
, in Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
. Cost: about $2 billion. Also considered was a route from Iran to Multan which was seen as feasible due to Iran's huge oil and gas reserves. However, In 1996 when the Sanctions against Iran
Sanctions against Iran
This article outlines economic, trade, scientific and military sanctions against Iran, which have been imposed by the U.S. government, or under U.S. pressure by the international community through the United Nations Security Council...
were imposed, the FBI blocked the plan, and it was forcibly cancelled. A proposed 400 mile extension from Multan to New Delhi
New Delhi
New Delhi is the capital city of India. It serves as the centre of the Government of India and the Government of the National Capital Territory of Delhi. New Delhi is situated within the metropolis of Delhi. It is one of the nine districts of Delhi Union Territory. The total area of the city is...
would bring some of the gas into India's network of gas pipelines. Cost: $600 million.
A sea route from Gwadar
Gwadar
Gwadar also known as Godar is a developing port city on the southwestern Arabian Sea coast of Pakistan. It is the district headquarters of Gwadar District in Balochistan province and has a population of approximately 50,000.Gwadar is strategically located at the apex of the Arabian Sea and at the...
, Pakistan, to Dabhol, India, was never considered despite both locations being coastal towns.
Dabhol Power Station
The plant was to be constructed in two phases. In March 1995, the ruling Congress Party in Maharashtra lost to a nationalist coalition that had campaigned on an anti-foreign investment platform. In May, hundreds of protesting villagers swarmed over the site, and a riot broke out. Human Rights Watch and Amnesty International eventually charged the security forces guarding Dabhol for Enron with human-rights abuses; Human Rights Watch blamed EnronEnron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
for being complicit. On August 3, the Maharashtra ordered the project to be halted because of "lack of transparency, alleged padded costs, and environmental hazards." Construction ground to a halt. By then, Enron had invested about $300 million into the project.
Phase One
Phase one was set to burn naphthaNaphtha
Naphtha normally refers to a number of different flammable liquid mixtures of hydrocarbons, i.e., a component of natural gas condensate or a distillation product from petroleum, coal tar or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the...
, a fuel similar to kerosene
Kerosene
Kerosene, sometimes spelled kerosine in scientific and industrial usage, also known as paraffin or paraffin oil in the United Kingdom, Hong Kong, Ireland and South Africa, is a combustible hydrocarbon liquid. The name is derived from Greek keros...
and gasoline
Gasoline
Gasoline , or petrol , is a toxic, translucent, petroleum-derived liquid that is primarily used as a fuel in internal combustion engines. It consists mostly of organic compounds obtained by the fractional distillation of petroleum, enhanced with a variety of additives. Some gasolines also contain...
. Phase one would produce 740 megawatts and help stabilize the local transmission grid. The power plant's phase one project was started in 1992 and finally completed in two years behind schedule.
Phase Two
Phase two would burn liquefied natural gasLiquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....
(LNG). The LNG infrastructure associated with the LNG Terminal at Dabhol was going to cost around $1 billion.
In 1996 when India's Congress Party
Indian National Congress
The Indian National Congress is one of the two major political parties in India, the other being the Bharatiya Janata Party. It is the largest and one of the oldest democratic political parties in the world. The party's modern liberal platform is largely considered center-left in the Indian...
was no longer in power, the Indian government assessed the project as being excessively expensive and refused to pay for the plant and stopped construction. The Maharashtra State Electricity Board
Maharashtra State Electricity Board
Maharashtra State Electricity Board is a state-owned electricity regulation board operating within the state of Maharashtra in India. The MSEB was formed on June 20, 1960 under Section 5 of the Electricity Act, 1948...
(MSEB), the local state run utility, was required by contract to continue to pay Enron plant maintenance charges, even if no power was purchased from the plant. The MSEB determined that it could not afford to purchase the power (at Rs. 8 per unit kWh) charged by Enron. The plant operator was unable to find alternate customers for Dabhol power due to the absence of an open free market in the regulated structure of utilities in India. From 1996 until Enron's bankruptcy in 2001 the company tried to revive the project and spark interest in India's need for the power plant without success. The project was widely criticized for excess costs and deemed a white elephant
White elephant
A white elephant is an idiom for a valuable but burdensome possession of which its owner cannot dispose and whose cost is out of proportion to its usefulness or worth...
. Socialist groups cited the project as an example of corporate profiteering over public good.
Over the next year Enron reviewed its options. On February 23, 1996, Maharashtra and Enron announced a new agreement. Enron cut the price of the power by over 20 percent, cut total capital costs from $2.8 billion to $2.5 billion, and increased Dabhol's output from 2,015 megawatts to 2,184 megawatts. Both parties committed formally to develop the second phase. The first phase went online May 1999, almost two years behind schedule, and construction was started on phase two. Costs would now ultimately climb to $3 billion. Then everything came to halt. The MSEB refused to pay for all the power, and it became clear that getting the government to honor the guarantees would not be an easy task. Although Maharashtra still suffers from blackouts, it says it does not need and cannot afford Dabhol's power. India's energy sector still loses roughly $5 billion a year. Today, Dabhol, in which Enron had invested some $900 million, sits silent. This plant was taken over by Ratnagiri Gas and Power Private limited in July 2005.
Dabhol Today
The power plant Phase I which was re-named Ratnagiri Gas and Power Pvt Ltd (RGPPL) started operation in May 2006, after a hiatus of over 5 years. However, the Dabhol plant ran into further problems, with RGPL shutting down the plant on 4 July 2006 due to a lack of naphthaNaphtha
Naphtha normally refers to a number of different flammable liquid mixtures of hydrocarbons, i.e., a component of natural gas condensate or a distillation product from petroleum, coal tar or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the...
supply. Qatar based RasGas Company Ltd. started supplying LNG to the plant in April 2007.
The Dabhol Power plant consists of 3 blocks, each consisting of two GE make frame 9 gas turbines and one GE steam turbine. Block 2 commissioning work and Gas turbine 2A trial runs started on 25 April 2007.
The Dabhol Power Plant Project is operational as of April 2009 with 900 MW RLNG
Liquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....
fired running capacity but there are problems due to non-availability of operational insurance, also the decision is largely dependent upon political developments in the country as well as performance of newly repaired rotors. As 1 each of the combined cycle generator unit (total 3) is under shutdown.
External links
1. Good and credible information, from a US House of Representatives report, 20022. Interesting though non-precise case study on Dabhol from IIT Madras