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In Phase III of the R-LNG (Regassified Liquified Natural Gas) e-auctions held for stranded gas-based power plants on Sunday, nine plants with a combined capacity of 5,942 MW agreed to pay anywhere between ₹0.03 a unit and ₹0.02 a unit to the government for firing up their plants using the imported fuel.
Phase III of the auctions were deferred to March 20 after the plants had said no to subsidy on the original date of the auctions on March 15. This compelled the Ministry of Power to allow for ‘negative bids’, a mechanism under which plants pay back a certain amount for every unit of electricity produced using the imported fuel.
In the negative bidding, the nine plants committed to generate a total of 6.791 billion units of electricity using 7.62 million standard cubic metres of R-LNG daily.
“As a result there is estimated savings of ₹ 18.29 crore to the government’s Power System Development Fund (PSDF)," an official statement from the Ministry said. This is in addition to the ₹ 1,600-crore of savings on account of the plants saying no to the PSDF subsidy.
Last year, the government had introduced a mechanism under which stranded gas-based power plants were allowed to fire up their plants using R-LNG. Tax breaks were offered for transport of the fuel and a subsidy from the PSDF was given directly to the electricity distribution utilities to keep the cost of power low. The plants seeking the lowest amount of subsidy were allocated the gas, basically giving a premium to efficiency.
In Phase III, the highest allocation was for Ratnagiri Gas and Power Private Ltd. The plant will generate 2.087 billion units between April 1 and September 30 using 2.13 million standard cubic metres a day of R-LNG.
Lanco Group’s Kondapalli plant in Andhra Pradesh was allotted 1.55 million standard cubic metres a day of the imported natural gas for generating 1.408 billion units in the first half of the 2016-17 fiscal.
GMR Energy’s two plants and one plant of GVK Industries were among the other major allottees of the imported natural gas.
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