The likes of GMR, GVK, Lanco and NTPC are in the fray for subsidy from the Power System Development Fund to run their stranded gas-based power plants on imported natural gas. Phase II of electronic auctions of PSDF support for stranded gas-based power plants to use imported natural gas began on Tuesday.

Bidding began at 11 am with players bidding for subsidy support for a target plant load factor of 35 per cent. As at 1 pm, the bidding has moved to a target plant load factor of 40 per cent. The current bids would lead to a PSDF outgo of Rs 1,273 crore.

For Phase II, the target plant load factors have been increased as after Phase I of the e-auctions, incremental production from gas-based power plants did not increase significantly. Bidding for Phase II began at 35 per cent PLF, which was the cut off point in Phase I.

The available imported gas is 2.443 billion standard cubic meters. The auction will stop once the players have bid for 120 per cent of the available capacity of natural gas. The target PLF will keep increasing in steps of 2.5 per cent till it reaches 50 per cent or the bids are for 120 per cent of the available capacity of gas.

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