GMR, Others Secure Gas Under Power System Development Fund Scheme

New Delhi: GMR, GVK and Lanco were among the players who secured around 8 mmscmd of imported gas for running their stranded power projects, which will aid generation of 6.79 billion units of electricity.

The auction conducted by state-run MSTC Ltd for re-gasified natural gas (R-LNG) started on Sunday morning and continued for about two hours. The bidders bid for gas at negative subsidy or premium of up to three paise per unit which will result in earning of Rs 18 crore to the government.

The result of the e-auction on MSTC's website showed that bidding for 7.72 mmscmd was completed successfully which will lead to generation of 6.79 billion units of electricity from April 1 to September 30, 2016.

The maximum quantity of 2.35 mmscmd gas was booked by Ratnagiri Gas and Power Private Ltd commonly known as Dabhol project, followed by Lanco Kondapalli Power (1.58 mmscmd) and GMR Rajahmundry Energy (1.09 mmscmd).

According to auction results, Konaseema Gas Power has booked 0.71 mmscmd, followed by Pioneer Gas Power (0.55 mmscmd), GMR Vemagiri Power Generation (0.52 mmscmd), Gama Infraprop Private Ltd (0.35 mmscmd), GVK Industries (0.32 mmscmd) and Sravanthi Energy (0.25 mmscmd).

The Empowered Pool Management Committee (EPMC), the nodal authority for this auction, had decided to scrap the auction for stranded gas-based power projects (SGP) held on Tuesday last in the backdrop of bids hitting zero (subsidy) within minutes of the start of bidding.

The Committee then decided to conduct the auction afresh to give equal opportunity to all. Thus, the e-auction for imported gas was conducted under the Power System Development Fund (PSDF) on Sunday.

This auction will be finalised on the basis of e-bidding results by the EPMC and after that the successful bidders would be awarded gas.

Under the PSDF, government provides financial support to SGPs to buy imported gas. However, in Sunday's auction, the bidders were allowed to quote negative gas subsidy or premium for booking gas quantities they need.

The outlay for the support from PSDF was fixed at Rs 7,500 crore (Rs 3,500 crore and Rs 4,000 crore for 2015-16 and 2016-17 respectively).

Auctions for the first phase (June 1-September 30, 2015) of PSDF Support to gas-based power plants were held in May last year. A total of 10,270 MW plants were able to secure gas allocation. The entire process was completed in less than a month and gas supply by GAIL started on June 1, 2015.

Auctions for the second phase (October 1, 2015 to March 31, 2016) were held in September 2015 and helped in revival of gas-based generation plants with installed capacity of 11,717.72 MW. Total incremental electricity expected to be generated under phase two is 12,472.6 million units.

Plants rarely use costly imported gas as power produced from R-LNG costs much more than that from a domestic coal-fired plant or a domestic gas-fired plant.