9 gas-based power plants to generate 6.79 billion units in first half of fiscal

21 Mar 2016 Evaluate

Government in the third phase of reverse e-auction for stranded gas-based plants (SGPs), have announced revival of 9 gas-based power plants with total installed capacity of 5,942 MW, which successfully bid electricity at Rs 4.70 per unit for six months beginning April 1. Earlier the phase III of the auctions were deferred to March 20 after the plants had said no to subsidy on the original date of the auctions on March 15. For the first and second phases auctions were held in May and September respectively last year.

In the auction process concluded on March 20, nine plants emerged as preferred bidders and were allocated 7.62 million standard cubic meter per day (mscmd) e-bid RLNG (reliquefied natural gas). These plants would generate 6.79 billion units of which will be supplied at or below Rs 4.70 per unit to the purchaser discoms during the period from April 1, 2016 to September 30, 2016.

The government has further detailed that the reverse-auction resulted in aggressive negative bidding with the lowest bid at Rs 0.03 per unit. As a result there is estimated savings of Rs18.29 crore to the government's Power System Development Fund. A total of 10 mscmd of RLNG will be imported to run SGPs and domestic gas plants (DGPs) between April 1 to September 30, while 8.9 mscmd of gas will be imported for SGPs, 1.1 mscmd will be allocated to DGPs. In Phase III, the highest allocation was for Ratnagiri Gas and Power. The plant will generate 2.087 billion units between April 1 and September 30 using 2.13 million standard cubic metres a day of R-LNG. Lanco Group’s Kondapalli plant in Andhra Pradesh was allotted 1.55 million standard cubic metres a day of the imported natural gas for generating 1.408 billion units. GMR Energy’s two plants and one plant of GVK Industries were among the other major allottees of the imported natural gas.

Last year, the government had introduced a mechanism under which stranded gas-based power plants were allowed to fire up their plants using R-LNG. Tax breaks were offered for transport of the fuel and a subsidy from the PSDF was given directly to the electricity distribution utilities to keep the cost of power low. The government is offering Rs 1,400 crore subsidy for SGPs and Rs 200 crore to the DGPs for buying imported gas to run their plants. It had, in March last year, allowed gas imports by way of e-auctions for 31 gas-based power units, with a capacity of 14,000 MW, lying idle for lack of feed stock.

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