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Hyderabad, Dec. 10 GMR Infrastructure Ltd has informed the BSE that Vemagiri Power Generation Ltd (VPGL) with installed capacity of 370 MW has commenced power generation with gas diverted from other plants in Andhra Pradesh.

Vemagiri is a 100 per cent subsidiary company of the wholly-owned subsidiary GMR Energy Ltd, which in turn is a subsidiary of GMR Infrastructure Ltd.

The 370 MW of gas-fired plant is located at Vemagiri village in Kadiam mandal of East Godavari district in Andhra Pradesh.

The natural gas has been diverted following an arrangement to run some of the projects with natural gas and those with capability to use naphtha will fire them using the latter as fuel. This follows a decision by the State Government to ensure that the unutilised capacity is adequately harnessed to meet the demand-supply mismatch during rabi season through to summer of 2009. Based on the arrangement made by AP Transco, VPGL will operate on this diverted gas at a plant load factor of 60 per cent till May 31, 2009.

Meanwhile, Reliance Industries KG basin gas is also expected to be available in the first quarter of calendar year 2009.

The Andhra Pradesh Government had earlier this year decided to power some of the new gas-based plants — Vemagiri, Gauthami, GVK extension with natural gas and manage existing gas plants with naphtha.

Following this development, Lanco Kondapalli, GVK Jegurupadu and Spectrum will divert the natural gas and run their plants with naphtha. This is because these projects have been designed to run on different fuels.

With the price of naphtha coming down in the last few months, the cost of generation of one unit has come down from about Rs 12 a unit to Rs 9 last month and to about Rs 7 now. This is an interim arrangement till gas flows from KG basin.

More Stories on : New Projects | Power | Andhra Pradesh

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