Power Minister Piyush Goyal expects prices to fall further in the next round of subsidy-based auction of gas for power projects, given the softening of global rates and muted electricity demand in the country. Generators are unable to sell power as distribution companies are buying cheap electricity on a short-term basis from the market, which makes for a strong case for the bids to be even more favourable for the government. In an attempt to kick-start stranded gas-based projects, Prime Minister Narendra Modi’s government had introduced subsidy-based auctions to import gas and supply it to these power units.
Lower prices for gas would translate into a lower subsidy burden for the government. “The fourth round of bids will start soon and we are looking at the possibility of even lower prices given that the international gas prices are much lower than what they were one-and-a-half years back when we formulated the scheme. Also, the appetite for expensive power is not there,” Goyal said. In the third round of the bids that concluded earlier this year, none of the nine participants sought subsidy support, resulting into a savings of. Rs. 16 billion to the government. The fourth round is expected to take place in September. He said generators are unable to sell power as discoms are buying cheap electricity from short term market. “We are striving to transform India from a power-deficit nation to a power-surplus nation.
Not only that there must be sufficient power, it must be affordable” as well, he said at the Motilal Oswal investor conference here late Tuesday. The minister said the UDAY (Ujwal Discom Assurance Yojana) scheme for reviving beleaguered discoms has been a game-changer. While there is still time before one can see substantial improvement on the ground, the benefits of the scheme are already visible on the financial side, he said.
“The results are encouraging and states are serious about implementing it.” If all states implement the scheme efficiently, it will benefit the country by $25-26 billion every year in terms of the savings, he said. Goyal said the government is determined to remove roadblocks to achieve the target of 24×7 power to all and that the units of power generated in the country could double in the next five-six years on the back of better efficiently and capacity addition. “By merely utilising existing capacity efficiently, India can enhance power generation by 50%,” he added. Dion Sims Womens JerseyShare This