Nalco looks at hydel power to cut costs

Bhubaneswar: The Central-sector National Aluminium Company (NALCO) is keen to develop hydel power stations down Hirakud dam as running smelter with coal-fired power plants become costly. “We have given a proposal to the state government to set up hydro power stations on Sindol sites,” NALCO director, finance, BL Bagra, told FE. Bagra, who is looking after the company’s future projects, said the company has also offered to develop hydel stations jointly with the Orissa government-owned Orissa Hydro Power Corporation (OHPC). The Orissa government has identified three sites -– Sindol-I (100 MW) at Deogaon, Sindol II (100 MW) at Kapasira and Sindol III (120 MW) at Godhaneswar -– down the Hirakud dam on the river Mahanadi. The three projects have been approved by the government of India. The world over power-intensive aluminium smelters are mostly fed with cheap power from hydel stations. Running smelter with power from coal-based thermal power plant is uneconomic, said Bagra. NALCO, which is running its smelter with thermal power, has seen costs escalating. The power cost has become high in recent times as the company had to depend on imported coal as coal supply from Mahanadi Coalfield became uncertain, said Bagra. High power costs have started eating into NALCO margins at a time when aluminium prices are at a low. NALCO, in fact, finds it more profitable to sale alumina than selling aluminium. “Though the hydel stations are not big in size, it will certainly reduce input costs," said Bagra. NALCO, which has a smelter of 3.45 lakh tonne per annum (MTPA) capacity along with a 960 MW thermal power plant at Angul, is proposing to set up another green-field smelter project of 5 lakh MTPA at Brajarajnagar in Jharsuguda district. A 1,250 MW thermal power project is part of the aluminium complex. Bagra said the Sindol hydel project will benefit the company as it is closer to Angul and also the proposed project site at Brajarajnagar.