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Home News Power Sector News Govt mulls pooling domestic, imported fuel to address power woes

Govt mulls pooling domestic, imported fuel to address power woes

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GasPooling of domestic natural gas with imported fuel seems to have emerged as an answer to revive the stranded gas-based power plants. "The Government is considering policy intervention to give a new lease of life to such capacities, which have been lying idle or under-utilised due to steep decline in domestic output," a Government official said. Indications are that a decision to this effect may be taken at by the Cabinet soon.

About 14,000 MW of gas-based plants with an investment of over ₹ 60,000 crore, which have no domestic fuel supply, face immediate risk of becoming non-performing asset, the official said.

In addition to these, about 10,000 MW of power plants are receiving limited quantity of domestic gas and most are operating at very low plant load factor. The power plants are both in public as well as private sector.

If the Government is able to come out with a workable solution and revive these plants then it will lead to about an additional 75 billion units of power, which in monetary terms, translates to about ₹ 40,000 crore.

A large number of gas-based power plants had come up following the discovery of gas in the country's East Coast. But, with the production falling beyond expectations, power plants with firm supply allocations also did not receive the allocated quantity.

Gas-based generation is also considered ideal for balancing the intermittence of renewable generation and in maintaining grid stability by utilising as spinning reserves.

Industry observers said that for the Government the proposal to revive the stranded gas based generating capacity would also help in providing 24x7 Power to all.

Aware that pooling of imported gas would mean higher tariff, the Government is also contemplating giving support to the distribution utilities through the Power System Development Fund, which is basically meant for grid stability and security.

In fact, the Ministries of Power and Petroleum & Natural Gas were working together on a proposal to have a pooled price for this gas. Pooling is deriving an average price for gas produced domestically from all sources, something which the power sector has been pitching for.

Source- The Hindu


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