Gas shortage may hit Dabhol plant functioning

The Maharashtra government is heavily banking upon Dabhol power plant to start functioning at its full capacity of 2,150 Mw to help the state tackle the 5,000 Mw shortage during peak summer season.

However, all this depends on the ability of GAIL (India) Ltd to supply the gas required to make the plant fully functional.

According to the schedule announced by the Ratnagiri Gas and Power Pvt Ltd (RGPPL) board, Block II (750 Mw) of the plant will be fully operationalised by the end of this month, followed by Block III in October. The entire plant is scheduled to become functional by the end of January next year.

However, the RGPPL management is sceptical about meeting the January-end deadline as GAIL, which is one of the promoters of RGPPL, failed to provide gas for Block II and Block III. It was Petronet LNG that managed to get 1.5 million tonnes gas a year for the Dabhol project.

But this gas is sufficient only for two blocks of the plant. To make the third block operational, RGPPL needs another 0.9 million tonnes gas annually.

"GAIL has promised to bring the gas for Block I by January, but considering our past experience, we are keeping our fingers crossed," said a senior official of the National Thermal Power Corporation (NTPC), which is also one of the promoters of the plant.

However, even if Maharashtra manages to get the entire 2,150 Mw from the Dabhol plant, it will require to pay a higher price to get all the power generated by the plant, compared to the present price.

The state-owned Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has signed a power purchase agreement (PPA) with RGPPL to get power at Rs 3.10 per unit for 1,400 Mw.

The RGPPL has agreed to this price as it will be getting gas from Petronet LNG for $4.83 per million British thermal unit (mmbtu).

So, even if GAIL manages to get the gas for the remaining block, it will be significantly higher than the $4.83 price, said a senior RGPPL official.