Evader, Inc. (EVDR) (PINK SHEETS:EVDR), subsidiary ASCC Construction is looking to set up renewable power generation plants in Punjab through a joint venture with the Punjab Renewable Energy Development Agency.
ASCC CEO Avtar Singh Walia said, “We will sign the memorandum of understanding with the Punjab Renewable Energy Development Agency this year. If the approval is accepted for the generation of 154 megawatts of biomass-based power, an investment of Rs 4.2 crore (approximately $1 million U.S.) per megawatt is required for setting up such a project. A consortium was formed to obtain the tender and a special purpose vehicle would be formed to execute and run the project.
“On approval, the company would sign an agreement with the Punjab State Electricity Board for the distribution of power. It would take about 33 to 34 months for the completion of the projects.”
The state needs additional power of about 4,000 megawatts in the next three years to keep pace with rapid industrialization and urbanization. The initial viability study of these projects was done by the Punjab Renewable Energy Development Agency. The private player hired its own consultants to work on feasibility reports because location was the most important factor. The inputs (rice husk, wheat straw, sugarcane straw) have to be collected within a radius of 15 to 20 kilometers to make the project viable.
“Although we propose to make all the plants of equal capacity, the proximity and volume of inputs available for specific plants would determine the capacity of the plant,” Mr. Walia added.
This is the first project of its kind in the state, according to Punjab Renewable Energy Development Agency officials. It would help raise the incomes of farmers in the state who don’t know the techniques to make gainful use of the husk and straw. The independent power producers will be eligible for an exemption from paying an electricity duty and local area development tax.
This seems like an over ambitious target, given that not only is the availability of feedstock an issue, but also the availability at the right price. Most successful biomass projects in India not firing on coal are those that have a long-term feedstock arrangement.