Government’s New Schemes Set to Strengthen 24,000-MW Gas Power Plants

The power and petroleum ministries are the deciding authorities of the new proposal. The earlier scheme entailing subsidy has been canceled. There will be no subsidy in the proposed new scheme and hopes to help operate the power stations at 90% capacity by selling the bundled power. The earlier proposed e-regasified liquid natural gas scheme (e-RLNG).

December 05, 2019. By Hemant Arora

The government is taking decision on a scheme to salvage 24,000 MW of stressed gas-based power plants, built at an investment of over Rs 1 lakh crore, by importing natural gas and bundling the output with cheaper solar energy. The power and petroleum ministries are the deciding authorities of the new proposal. The earlier scheme entailing subsidy has been cancelled. There will be no subsidy in the proposed new scheme and hopes to help operate the power stations at 90% capacity by selling the bundled power. The earlier proposed e-regasified liquid natural gas scheme (e-RLNG), which involved an e-auction, was successful when there was electricity shortage in the country and in the later tranches, the scheme did not garner much interest from the developers, according to a senior government official.

He further added, bundling of solar power with an equal amount of gas-based power is expected to result in lower cost of production than blending domestic and imported gas-based power. Power Trading Corp of India (PTC India) has been asked to work on the proposal, as per the official. The gas is proposed to be imported by GAIL India with concessions and haircuts by central and state governments, power companies and gas transporters to make it affordable.

GAIL has indicated to the power ministry that it can import LNG for about $6 per unit, and deliver it to power plants for $8 a unit, which includes re-gasification, transit and taxes, according to the sources.

With this, power can be generated at about Rs 4 per unit. The power ministry’ thought is to blend this with the assumed average renewable energy cost of Rs 2.75 per unit, expecting the blended rate will find enough takers among distribution companies under the merit order dispatch rule, as per the sources.

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