Public sector natural gas pipeline operator GAIL India is in talks with the government, seeking extension of incentives for gas-based power producers.
“We are working with stakeholders to cut down the input cost and make gas-based power generation projects more viable,” GAIL Chairman BC Tripathi told BusinessLine.
An option is to bundle it with solar or providing some other kind of support, he added.
A senior GAIL official said this proposal is similar to the initial plan to use gas-based power plants as spinning reserves to mitigate tariff hikes.
The cost of natural gas-based power has been traditionally higher than conventional power generation, as natural gas-based power generation can be ramped up to meet peak demand and bridge the power supply shortage. This scenario has changed now and gas-based power generation is no longer financially viable due to abundance of cheap power.
Since solar power has become cheaper due to competitive bids, gas-based power can be bundled with it to bridge the demand for power when solar power is unavailable during the evening and night hours, the official explained.
Commenting on the total consumption of natural gas by gas-based plants, Tripathi said: “Power plants are currently consuming about 25-26 mmscmd of gas. Of this, 5 mmscmd is imported liquefied natural gas, and the rest is domestic gas.”
The government had also initiated a scheme to subsidise imported gas-based power generation. This scheme was discontinued from March 31 this year.
“Before power pooling, we were selling almost 4.5 mmscmd to such plants who were enjoying the benefit of subsidy. Today, we are supplying almost 3.2 mmscmd to such plants and they are not getting any subsidy but they are sustainable at the current price,” Tripathi said.
Almost 80 per cent of these plants using subsidised gas are still drawing gas. Power plants in Uttarakhand and Dabhol are still drawing gas, he added.
According to the Petroleum Policy and Analysis Cell, around 242 MW of power is generated from 1 mmscmd of gas under standard conditions.
Going by the amount of gas currently consumed, nearly 6,292 MW of gas-based power generation is currently operational out of the 25,000 MW stranded capacity in the country. Russell Wilson JerseyShare This