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The Empowered Pool Management Committee, which decides on subsidy to be released for operating gas-based power plants through a pool of domestic and imported fuel, has cut the subsidy ceiling for stranded plants by about ₹1 a unit in Phase III of the R-LNG e-auctions.
The subsidy is called the Power System Development Fund (PSDF) Support. For Phase III of the e-auctions, PSDF Support has been capped at ₹0.84 a unit for partially stranded plants (those getting some domestic natural gas) while for fully stranded plants (those getting no natural gas) the ceiling has been fixed at ₹0.41 a unit.
In Phase III, power plants will be seeking imported gas to operate their plants between April 2016 and September 2016. In the previous phase (October 2015-March 2015) the PSDF support was capped at ₹1.97 a unit for partially stranded plants and ₹1.45 a unit for fully stranded plants.
The Centre had in April 2015 formed the Empowered Pool Management Committee to oversee import of fuel for such partially and fully stranded gas-based power plants.
Under the mechanism, power plants bid for their gas requirements on the subsidy fixed by the Centre. The bidder seeking the lowest subsidy support is given preference. Basically, premium for efficiency is the criteria.
Flexibility was given to the Committee to review the subsidy cap depending on the prevailing external factors such as global gas price and the number of bids it gets.
In Phase III of the R-LNG e-auctions, GVK Power, GMR Energy, Lanco, Essar Power and others are expected to participate.
Between April 2015 and February 2016, gas-based power plants in the country generated 42,409 million units while operating at a plant load factor of 22.22 per cent. In the same period last year, the plants generated 37,818 million units while operating at 20.96 per cent plant load factor.
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