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APR 15 2015

Stranded power plants: bidding for gas imports by month-end

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 15th APR 2015

The empowered pool management committee, which is overseeing import of fuel for stranded gas-based power plants, expects to start the bidding process by the month-end.

 “We are looking at April-end to invite bids from power plants to ensure that power purchase agreements are in place by June so that fuel supplies for the monsoon season — June to September — are confirmed to fire up the plants,” a senior Power Ministry official said.

 The government recently came out with a mechanism to revive almost 14,000 MW of capacity with an investment of over Rs. 60,000 crore, which is stranded because of non-availability of fuel. In addition, about 10,000 MW power plants are receiving limited domestic gas and are operating at very low plant load factor.

 Under the mechanism, power plants will have to bid for their gas requirements on the price fixed by the government. The lowest bidder will be given preference. Basically, premium for efficiency will be the criteria.

 The preliminary electricity price of Rs. 5.50 a unit has been fixed by the government, with flexibility given to the committee to review the same depending on the prevailing external factors like global gas price and the number of bids it gets.

 MSTC Ltd, the e-commerce platform, will be used for conducting the auctions to ensure greater levels of transparency, the official said. GAIL has been nominated to import gas from the spot market. It is projected to import 10 million standard cubic metres a day (mmscmd) in five months of monsoon and 18 mmscmd for the remaining months.

 The government will also use the money from the Power System Development Fund (PSDF) to support the distribution utilities that will buy this power. The PSDF has a corpus of Rs. 9,500 crore. For 2015-16, the money to be extended for such projects will be Rs. 3,500 crore, and for the next yea, it will be r Rs. 4,000 crore.

 The beneficiary States will mainly be Gujarat, Maharashtra and Andhra Pradesh.

 In 2014-15, gas based power generation fell 7.5 per cent year-on-year to 41,099.42 million units. Gas-based power plants operated at only 20.81 per cent plant load factor as compared to 24.87 per cent in the previous fiscal. In fact, for March 2015, gas-based power plants operated at only 18.66 per cent plant load factor.

 Worryingly, generation targets from gas-fuelled plants for 2015-16 have been brought down further. For the current fiscal, the target has been kept at 40,282 million units.


Gujarat Maharashtra Andhra Pradesh Gas Power Generation Import Power Electricity

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