Tata Power has requested for gas from Reliance Industries (RIL) KG-D6 fields to fuel one of its Trombay units, but the government has asked it to first install a gas-based turbine.
"If Tata Power intends to put up a new Combined Cycle Gas Turbine (CCGT) unit then their proposal has be to be considered," a source quoted the ministry as having told the company in a letter.
The Power Ministry is of the view that allocation of gas to the Trombay 150 Mw unit-4, which ran on liquid fuel, would amount to inefficient use of gas, as the thermal efficiency of the old unit is likely to be just 35 per cent as compared to 50 per cent of a new CCGT.
The ministry said that if a new CCGT comes up then it would consider allocating gas, along with proposals of other new power projects that are in the planning stage.
Tata Power, in April this year, had asked the ministry for one million standard cubic metres per day of gas for its 150 Mw unit-4, which was shutdown after operationalisation of unit-8, in order to meet emission norms.
The company requested gas allocation from RIL KG-D6 basin in order to deal with the power crisis in the city of Mumbai, to which the Trombay station supplies electricity.
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Arguing why it needs gas, Tata Power said the city will have to purchase power from "external sources" which will increase the cost of electricity.
The company also said that there is a possibility that allocated utilities (for the KG gas) may not pick up their quota on a regular basis and also by the possibility of additional production by RIL.
Central Electricity Authority (CEA), techno-economic clearnce body under the Ministry of Power in March, this year rejected Tata Power's request for the same.
CEA said that the recommendations for allocation of gas to the existing gas-based projects and those to be commissioned during the 2008-09 have already been made to Power Ministry in accordance with the decision of the Empowered Group of Ministers (EGOM).
It will not be possible for us (CEA) to recommend gas for the proposed unit-4 at Trombay.