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In order to prevent gas-starved power capacities becoming non-performing assets (NPAs), the Power Ministry would approach the Prime Minister Manmohan Singh-headed Cabinet Committee on Investments (CCI) to consider the gas price pooling mechanism.
Last week, the issue was discussed by the Principal Secretary to Prime Minister Pulok Chatterjee along with Power Secretary P. Uma Shankar and Petroleum Secretary Vivek Rae.
“The Power Ministry would take to CCI the availability versus demand for gas, current arrangements in the supply and implications of pooling for the economy and individual power producers,” said a Government official privy to the issue.
The Ministry is looking to take up the matter with the Cabinet panel as early as end-April. The draft note for consultations with stakeholders would be floated shortly, the official added.
However, the Power Ministry would not like to put up the pooling mechanism as a long-term mechanism, he added. The proposals would cover 2013-14, 2014-15 and 2015-16.
In a recent interview with Business Line , Jyotiraditya Madhavrao Scindia, Minister of State (Independent Charge) for Power said, “I am discussing with my officials putting together a policy for these stranded plants. We are evolving that on a daily basis.”
The gas price pooling idea is not new. But, the Government is looking to revive the proposal as additional infrastructure to import 21 mmscmd more of natural gas is expected to be added in 2013-14.
The State electricity distribution companies find it difficult to buy power generated from imported gas because it is expensive. Mixing imported with domestic gas may help bring down power generation cost.
In February, natural gas production in the country went down by 20.08 per cent when compared to the corresponding period in the previous year, data released by the Petroleum Ministry shows.
According to the Power Ministry, there are 17,500 MW of operational power plants. Of this, 9,000 MW are not getting domestic gas. Another 8,000 MW capacity is expected to be added in the next six months.
At present, 33 mmscmd of domestic natural gas is supplied to the power sector. Of this, 23 mmscmd is supplied to power plants linked to the grid and another 10 mmscmd to off-grid plants.
To operate 24,000 MW gas-fired capacities at 70 per cent plant load factor, nearly 90 mmsmcd of gas is required.
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