Our Bureau

New Delhi, Oct. 6

THE Government is having a rethink on the setting up of new gas-based power projects due to fuel shortage being faced by the sector. The Power Secretary, Mr R.V. Shahi, on Thursday said that he does not see gas-based power projects coming up in a "big way" unless there are assured supplies of gas and certainties about the pricing of the fuel.

"The power sector is clear that unless we have predictable supplies of gas and firm prices, it is not feasible for gas-based projects to come up in a big way," Mr Shahi told newspersons here. He said that out of the current gas-based power capacity of around 10,000 MW, as much as 40 per cent was under-utilised due to inadequate supplies and uncertainty in the prices, he said.

Gas-based power producers, including NTPC Ltd, have been struggling to run their plants because of supply and pricing concerns. Several projects, including NTPC Ltd's upcoming Kawas and Gandhar station in Gujarat, are among those facing delayed commissioning on account of a fuel shortage.

NTPC had selected Reliance Industries for gas supply to each of the 1,300-MW Kawas and Gandhar projects, but the signing of a formal agreement has been hanging fire following differences over issues, including the pricing of gas and penalty clauses. Mr Shahi said the Ministry would put up the various constraints being faced by the power sector at the next meeting of Prime Minister's Energy Coordination Committee (EEC).

The ECC has held two meetings so far, and discussed the shortage of coal and gas for power plants. Thermal power stations have also been facing a major coal crunch over the last two years. Mr Shahi said the country would import 13.5 million tonnes of coal this fiscal, and 20 mt next fiscal to tide over the shortage. The anticipated coal shortage next fiscal is estimated at 30 million tonnes, he added.

On the long-pending tariff policy, Mr Shahi said the Government has concluded discussions with stakeholders and would soon take the policy to the Cabinet. The policy will lay down the Government's guidelines for power sector regulators to fix the bulk and retail tariffs.

(This article was published in the Business Line print edition dated October 7, 2005)
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