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Gas yet to fully fire power generation

Debabrata Das Richa Mishra New Delhi | Updated on January 23, 2018 Published on August 16, 2015

Subsidy support provides stability, but generation ramp up to take time

Gas-based power generation may have grown only 5.2 per cent ever since the Government approved a subsidy support to power plants for importing the fuel, but producers say this is not a cause for worry.

“The scheme for subsidy support was to ensure that plants keep running and meet their interest cost. There was a situation when nothing was happening, this is at least an improvement,” one of the developers told BusinessLine.

In order to revive gas-based power plants, the Government had at the end of March approved a scheme where developers bid for imported gas or Regassified Liquefied Natural Gas (RLNG). Those seeking lower subsidy while promising higher generation were the preferred ones.

Under the scheme, completely stranded plants were to get ₹6.12–6.14 a unit for the power they generate through RLNG with ₹4.7 a unit being paid by the distribution utilities and the rest coming from Power System Development Fund. This was meant to help generate 5.05 billion units of additional power during the June–September period, according to the Power Ministry.

The auctions were held in May with fuel to be provided from June 1.The auction concluded on May 12 and 13 for both completely stranded and partially stranded plants.

Half way into the June-September period, gas-based power plants have generated 373.65 million units more than last year. Plant load factors have improved 2 percentage points to 21.35 per cent over last year. But, a surge in gas-based power generation is yet to be seen.

Further, spot RLNG supplies to these units in June was only 1.39 million standard cubic metres a day, less than a fifth of what was sold in the auctions. “While there hasn’t been a sharp rise till now, with the RLNG auctions, gas-based power plants can ramp up power if need be,” another industry source added.

Lack of demand

Partly, this may be a result of lack of demand from state electricity distribution utilities, sources added. The lack of demand from the States have resulted in lower utilisation of thermal power plants as well and has often left power tariffs at zero or close to zero on the merchant power exchanges.

Published on August 16, 2015
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