10 power plants to get imported gas supply

NEW DELHI: Gas-based power plants with over 10,000 mw capacity will receive imported gas supply under the government’s bailout package for stranded and underutilised assets.
Ten idle power plants with a capacity of 6,860 mw will receive imported gas supply under the scheme to operate at 35% capacity and meet their debt obligations. The plants belong to Torrent Power, Lanco Infratech, GVK Power, RVK Energy, GMR Energy, Ratnagiri Gas and Power and, Gujarat State Electricity Corp Ltd (GSECL).

The government on May 13 declared the 10 stranded gas-based power generation plants successful in the reverse e-auction process held a day earlier. The plants will generate 5.05 billion units of electricity which will be supplied at or below Rs 4.70 per unit to state distribution companies from June to September. The distribution companies or discoms will be given a support of Rs 723.99 crore from the Power System Development Fund (PSDF) for purchasing costlier power.

Another five power plants, which are running at low levels with domestic gas, were successful in the auction held on Wednesday. These plants belong to NTPC, CLP India, GSECL and Torrent Power. The plants will now be able to operate at 35% of their capacity.

These five plants will generate 644 million units of electricity which will be supplied at or below Rs 3.39 per unit to the purchaser discoms during the peak summer months between June and September. This will involve government support of Rs 19.99 crore from the PSDF.

Association of Power Producers’ director general Ashok Khurana said, “This is a good beginning. A good point in the auction is that developers have made balanced bids, making it a sustainable process in the long run.”

The total grid connected gas-based power generation capacity in India is 24,150 mw, of which plants with a capacity of 14,305 mw had no supply of domestic gas.

A government statement said the auctions have resulted in revival of a cumulative gas based generation capacity of 10,270 mw resulting in generation of additional 5.70 billion units of electricity during the peak summer months. This will involve government support of Rs 843.99 crore from the PSDF to the discoms.

The Cabinet had on March 25 approved the mechanism for importing gas for stranded and underutilised power plants, and supply of such electricity through a support.

To make gas affordable, states will forego some taxes while gas transporters and import terminals will also offer discounts on the charges for their services rendered to import LNG for this purpose. Power plants will completely forego return on equity while the Centre will draw from the PSDF to support the scheme that will help plants use 30-35% of their capacity and repay debt.