GAIL ventures into commercial wind power

GAIL has decided to install commercial wind power projects cumulatively contributing 200 MW to the grid.

The company has chosen to adopt a configuration of 8 units of 25 MW, each, across different sites in Karnataka or Tamil Nadu, or a combination of both.

GAIL claims that such a configuration would be appropriate, given that a larger number of players would be able to participate, increasing competition for the proposed tender, thereby, reducing execution costs. Further, land availability is also expected to be better with smaller projects as compared to a large one. In addition, the company also expects a higher combined capacity utilization factor for its projects in this manner.

Assuming a cost of Rs 6.13 crore per MW and in line with that seen for GAIL's operational 4.5 MW captive project in Gujarat, the project cost, including interest during construction, comes to Rs 1233 crore. In addition, the company estimates O&M costs of Rs 10 lakh per MW, with a 5% increase each subsequent year.

The company was encouraged by the government's decision to extend benefits accruing to infrastructure projects under Section 80IA of the Income Tax Act for the fiscal 2011-12.