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Home News Power Sector News Power companies demand discontinuation of gas supply to non core sectors

Power companies demand discontinuation of gas supply to non core sectors

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GasPrivate power companies have asked government to stop gas supply to non-priority sectors to prevent 8,200-mw electricity generation assets from being stranded. The companies have also demanded curtailing supply to existing power plants to help fresh projects. In a letter to oil ministry, Association of Power Producers director general Ashok Khurana has requested government to consider discontinuing 18 mmscmd gas supply to non-core sectors like fertilisers and steel.

Khurana has also suggested supplying gas to run power projects at 60% capacity against 70% at present.

In a letter to the Petroleum Minister, Mr S. Jaipal Reddy, the Association of Power Producers, has said about 8,200 MW of gas-based generation capacity can be commissioned in the next 18 months.

Of this, about 4,000 MW of power projects are ready to commence generation well before March 31, and are awaiting gas allocation from the Empowered Group of Ministers.

The Association has suggested that the Petroleum Ministry could consider discontinuing gas allocation to non-core sectors and use the same for core sectors, namely, power and fertiliser. Currently, over 18 mscmd of gas sold under the administered price regime is being supplied to the non-priority sector.

The total gas-based power plants' capacity in the country is about 16,600 MW. These consume about 66 mscmd of gas and the average capacity utilisation for all these plants is around 70 per cent. If the capacity utilisation for all these power plants is rationalised at 60 per cent or so, about 8-10 mscmd of gas will get released which can be allocated to the upcoming 11{+t}{+h} or 12{+t}{+h} Plan power projects, it suggested.

The power sector is going through a critical phase and unless urgent policy interventions are made it will result in idling of capacity. Availability of gas is also becoming scarce due to the steep and continuous reduction in gas production from Reliance Industries-operated D6 fields. Most of the States are rationing power to both domestic and industrial consumers.

The domestic power supply situation has deteriorated significantly and nearly 51 per cent of the coal-based projects are operating with less than seven days' stocks. The demand and supply gap is increasing progressively and if we allow the existing capacity to idle it will jeopardise 12th Plan capacity addition programme, the producers said.

Public money in the form of debt provided by various Indian banks and financial institutions is at risk unless these projects start commercial operation by March 31 and start servicing debt, they said.

Source- Economic Times


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