)
As the temperature soars this summer, 6,868 MW of additional power would be generated from 10 gas-based power projects.
The government on Tuesday launched bidding for providing imported gas to power plants through a subsidy mechanism. Out of the technically qualified 14 plants with cumulative 8,100 Mw, 10 power plants successfully bid, said the Ministry of Power.
The tariff of power was capped at Rs 5.5 per unit and power supply is to commence by June 1. "Out of the total subsidy forego of Rs 7,500 crore by the government, Rs 723.99 crore is the total amount that would go to these 10 stranded power plant with zero gas supply," power ministry officials said.
In the first phase, 14 stranded power plants with no gas supply competed for 8.9 mmscmd of imported gas (Regasified-Liquefied Natural Gas or RLNG), to be sourced by GAIL. GAIL would notify the price of RLNG after the total requirement has been finalised post the bidding.
The reverse bid was for the subsidy amount to come from Power System Development Fund to purchase the RLNG. The eligible bidders indicated the total incremental electricity they would generate using the e-bid RLNG. The companies also quoted the subsidy they require in order to ensure the net purchase price for the distribution companies to buy that power, without exceeding the target PLF. The bid started with the lowest PLF of 25 per cent with a ceiling till 35 per cent. The tariff is capped at Rs 5.5 per unit and the differential quoted would be the subsidy allotted from PSDF. It cannot exceed beyond Rs 1.74 per unit.
The lead banker to these plants would ensure all receipts of money would be utilised only for payments towards the variable cost of generation (fuel cost) and the operation and maintenance expenses in accordance with regulatory guidelines. Debt servicing would be made after capping fixed cost. Under the new gas mechanism, every stakeholder in the supply chain would have to forego a part of their returns on operations. While the central government would give up the service tax it levies on gas sourcing, the power plant operators would forego return on equity. GAIL would source the imported gas and along with Gujarat State Petronet Limited would 50 per cent of their transmission rate and 75 per cent of marketing margin in supplying imported RLNG.
Of the 24,150 Mw of gas grid-connected power generation capacity in the country, 14,305 Mw has no supply of domestic gas. On this front, an investment of about Rs 60,000 crore is at the threshold of becoming a non-performing asset. The remaining capacity (9,845 Mw), involving an investment of about Rs 40,000 crore, is working at a sub-optimal level, based on the limited quantity of domestic gas in India.
