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Oil ministry allows clubbing of scarce gas to power plants of same firm

04 Jan 2013 Evaluate

To enhance electricity generation in India, the oil ministry has notified guidelines for diversion of scarce gas between two or more power plants of the same owner. The ministry notified that the clubbing or diversion should not be for more than a year in total, which should lead to the higher electricity generation compared to the pre-clubbing arrangement.

According to the oil ministry, the step was taken in view of the fact that many power plants in the country were operating at low plant load factor (PLF) due to acute shortage in availability of domestic gas, leading to inefficient production of electricity. While, PLF is a measure of average capacity utilization, which can be affected by factors like non-availability of fuel and maintenance shut-downs.

The total gas-based power generation capacity in the country is nearly 19,000 MW but the gas available to the power sector is only 55 million metric standard cubic metres per day which can only feed around 10,000 MW capacity.

Further, the cost of the diverted gas would be according to the price based on the source of the diverted gas to avoid any financial burden on end consumers. Oil ministry added 'the entity seeking clubbing/diversion would bear any additional financial liability arising from the existing and future Gas Sale Agreement (GSA)/Gas Transport agreement (GTA) and any other swapping transaction resulting there from'.

The oil ministry also specified that end-use of the diverted gas would remain power supplier to state distribution companies and these steps will help many power plants operating at low capacity to improve their power generation.

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