The Andaman and Nicobar (A&N) islands are set to go green with state-run power generator NTPC Ltd poised to call bids to build a floating micro-liquefied natural gas (LNG) terminal to power the Indian archipelago, said two people aware of the development. This will not only reduce the carbon footprint by ending the practice of diesel-based power generation, but will also provide a much cheaper source of generating electricity.
The improved infrastructure will also allow India to secure the strategic advantage the islands offer in the Indian Ocean and protect its trade routes at a time when China is expanding its naval reach. India’s only tri-service command is based in A&N at the entrance to the Malacca Strait, the world’s busiest shipping route. Tensions along the Line of Actual Control between India and China have spiked with an Indian army officer and two soldiers killed in the Galwan area of Ladakh.
The clean fuel sourced through the Floating Storage Regasification Unit (FSRU) will help generate 50MW at Hope Town, South Andaman, enough to power the islands and replace the current system of generating power from diesel.
“The tender will be floated shortly,” added the second person cited above who also declined to be named.
Currently, the difference between the average cost of supply and average realizable revenue (ACS-ARR) for electricity generated from diesel on the island is about ₹17 per unit, with the government bridging the subsidy amount. Power generated from LNG is expected to cost about ₹5 per unit.
The plan has been in the works for more than a year with Prime Minister Narendra Modi laying the foundation stone of the 50MW LNG-based power project on 30 December 2018. The plant is to be set up by NTPC Vidyut Vyapar Nigam (NVVN), a unit of India’s largest power generator.
The LNG-fuelled power project is among several projects implemented in the islands to showcase India’s presence in the region and beyond. These include the expansion of naval air stations and building a railway line from the capital of Port Blair to Diglipur on North Island. State-run National Highways and Infrastructure Development Corp. Ltd (NHIDCL) is also building bridges and roads in A&N at an investment of around ₹3,000 crore.
The Centre also plans to establish ship-building and ship-repairing facilities at the islands. It is laying a submarine optical fibre cable between Chennai and Port Blair and five other islands of Havelock, Little Andaman, Car Nicobar, Kamorta and Campbell. It also plans to add new ships to the fleet for improving connectivity between the mainland and the islands.
India has been trying to augment its strategic capabilities in the region against the backdrop of China’s One Belt One Road initiative, which seeks to invest billions of dollars in infrastructure projects including railways, ports and power grids across Asia, Africa and Europe.