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Torrent Power today said it will not participate in the government’s e-auction for gas allocation tomorrow as electricity generated from the fuel would not be affordable for distribution companies.
For 2015-16 fiscal, the government launched the scheme for e-auction bidding for gas supply to stranded plants. It also included plants receiving some domestic gas through which gas was supplied at a fixed price to such plants along with other concessions.
The scheme also included financial support to discoms for making the gas-based power affordable to consumers.
“However, the said scheme for the period April 2016 to September 2016 envisages zero financial support to discoms and also allows negative bidding in the reverse auction.
“As a result of negative bidding, the corresponding concessions from the state government have also become uncertain in this situation”, the company said in a BSE filing.
The company said the under the present circumstances, power generated under this scheme will not be affordable to the discoms.
“Hence, the company has decided to refrain from participation in the e-auction of gas allocation scheduled on Sunday, March 20, 2016,” it said.
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