Seeking clarity from the Union Government on policies regarding the availability and pricing of gas, the State Minister for Energy, Food and Civil Supplies, Ms Shobha Karandlaje, said that this ambiguity, along with problems in transmission and distribution and shortage of coal, was one of the causes behind the slow pace of development of power projects in the State.

The minister, speaking at a conference organised by the CII, said that the State government proposed to take up these issues with the Ministry of Power.

Hike in Capacity

With the State looking at increasing capacity from 12,000 MW to 20,000 MW in the next 5 years, Karnataka can easily add 3,000 MW capacity if gas-based plants come up, Mr S Chandrasekhar, Chairman, CII Karnataka, and Managing Director, Bhoruka Power Corporation, said.

“The Dabhol-Bangalore gas pipeline project may come by 2012, for which the KPCL will be the anchor customer with an allocation of 700 MW,” Mr Chandrashekar said, adding that many companies were waiting for a clear cut policy on gas to set up power projects.

“The real issue is gas pricing for which the long-term contract comes to about $18 per mmbtu which translates to a power cost of $10 but if it is bought at spot rates it is just about $7 per mmbtu, so spot pricing needs to be developed,” he said.

The State Government is putting up an anchor plant at Bidadi for 700 MW on a spot price basis and the CII is requesting the Government to take this as a policy mechanism and arrange spot gas for the long term and give gas to developers and charge only for fixed cost, he said.

The Karnataka Renewable Energy Development Limited wants to add 3,000 MW in 5 years, but there are issues related to land and evacuation, he said.

Related Topics
comment COMMENT NOW