Acute shortage of domestic gas – especially from the KG-D6 basin – has left 18 power plants having a combined capacity of 7,000 mw and which are dependent on the natural resource, stranded, and according to top official sources, the Government does not plan to up any new gas-based plant. Among these, 10 plants are located in Andhra Pradesh and six in Gujarat.
Power Ministry sources have in fact clearly stated that the reason behind these 18 plants lying stranded is because gas supply from the KG-D6 fields has been “nil since March 2013 till date”.
As if this is not enough, they further informed that there are 10 power plants having a combined capacity of 5,349 mw and including the ones belonging to entities like lanco and Anil Ambani’s Reliance Power, which are ready for commissioning, but could not be commissioned due to non availability of domestic gas. The total cost incurred on these plants is almost Rs 22,000 crore, sources said.
Owing to the dismal scenario in terms of poor production from the KG-D6 fields (where most of the reserves are owned by Mukesh Ambani’s Reliance Industries ltd), the UPA Government had in 2012 issued an advisory to all the developers of gas-based power plants, not to plan any such projects till FY16.
The NDA Government too plans to adhere to the policy due to the paucity in gas production from the said fields. Also with the Petroleum Ministry having decided to have a relook at the gas pricing formula suggested by the Rangarajan panel (under which the existing price of $4 per mmBtu is to double to $8 per mmBtu), there is a clear likelihood that operators of the gas fields like RIl are not going to get the inflated price for the natural resource.Sources said that in such a situation, it would be interesting to see as to what steps the new
Government takes to ensure that operators improve production from the KG-D6 fields.Meanwhile apart from aforementioned 18 gas-based plants which are lying stranded, there are five more gas-based power plants having a combined capacity of 3,760 mw which were commissioned without any gas allocation, and these too are lying idle. Therefore at present, taking both public as well as private gas-based power plants into account, the total capacity of such plants which are lying stranded, comes to 10,757 mw.
The normative total investment corresponding to this capacity (10,757 mw), comes to about Rs 43,028 crore, sources privy to the information said. Also due to the non-availability of adequate gas to power plants, the existing gas-based capacity of all the public as well as private units which is 21,211 mw, is operating at an average plant load factor (PlF) of 23 per cent.
During the tenure of the UPA Government, the then Power Minister Jyotiraditya Scindia had sought priority allocation of gas in order to run such plants. However nothing much was done on it.
Recently a Committee of Secretaries has suggested to the Government, to allocate first priority of usage of domestic gas to city gas distribution companies. Currently these companies come fourth in the priority list of distribution of the natural resource. Top priority of gas usage is given to urea manufacturing plants, lPG plants and then power stations, followed by city gas distribution companies. The scenario for gas-based power plants therefore does not seem to change much in the near future, industry sources indicated.