Mahagenco’s Uran plant may finally get extra gas

NAGPUR: Mahagenco’s Uran gas-fired plant, whose half capacity is lying idle for years for the want of natural gas, can expect better days now. Presently, three out of Uran’s seven units are not generating. With the rates of natural gas going down in the international market, the central government has come up with a policy to make gas available to power plants.
Uran plant was set up in the 1980s to use the gas generated by Bombay High oilfield. When the gas output started falling, Uran’s capacity started lying idle. Mahagenco had plans to use imported gas to utilize full capacity but it never materialized due to high gas prices in the international market. If gas becomes available, MSEDCL will get extra power from NTPC’s Gandhar and Kawas power plants, located in Gujarat.
The centre has sanctioned Rs 3,500 crore under power system development fund (PSDF) for funding the scheme. State and central governments will have to waive off taxes and GAIL will have reduce its pipeline usage charges and marketing margin. A gas power plant will be considered for funding only if the concerned state agrees to waive off taxes.
The government was forced to intervene because around 14,300MW of the over 27,000MW gas based capacity was lying idle. Around 9,800MW capacity got some domestic gas but operated at a plant load factor (PLF) of just over 30% instead of 80%. Due to this, many banks are thinking of declaring the loans taken by generating companies as non-performing assets (NPA). The possible NPAs run into thousands of crores.
One such case is the Dabhol power plant. It had taken a loan of over Rs 8,500 crore from a consortium of banks led by ICICI Bank. As the plant has stopped generation due to lack of gas, the plant owner Ratnagiri Gas and Power Private Ltd (RGPPL) has stopped repaying the loan.
MSEDCL used to buy the entire power generated by Dabhol until a few years ago. However, realizing that it has turned into a white elephant, MSEDCL scrapped the power purchase agreement (PPA) with RGPPL in January this year. However, some southern states had evinced interest in buying Dabhol power and they are likely to be RGPPL’s new consumers.