Stranded power units may get imported gas at subsidised rates

New Delhi: The government is working on a Rs 18,000-crore subsidy scheme under which it proposes to offer imported gas at subsidised rates to stranded and underutilised power projects.

The scheme will be similar to the one run between 2015-16 and 2016-17, based on financial support from the Power System Development Fund, sources said.

NTPC, Ratnagiri Gas & Power, Torrent Power, GVK Industries, Lanco Kondapalli, GMR Energy, Gujarat State Electricity Corp and CLP India got gas in previous rounds of auction.


A cabinet secretary PK Sinha-led highlevel empowered committee had asked power and oil ministries to jointly frame a scheme for revival of gas-based power plants on lines of the earlier e-bid RLNG scheme. The proposal is now likely to be discussed by the ministries and put before a group of ministers (GoM) headed by finance minister Arun Jaitley.

The GoM met for the first time on Wednesday and discussed a few recommendations made by the Sinha panel on coal supply to power plants.

As per the scheme, the government is considering a gas auction mechanism for the electricity generating units by pooling any domestic gas with LNG and subsidising the tariffs to revive about 25,000 MW projects, an official said.

Earlier, the government was considering pooling ONGC deep sea gas with LNG. Industry experts said calculated at a cost of the present RLNG price of $9 (about Rs 626) per mmBtu, electricity tariff at pooled price might drop to around Rs 5.90 per unit. “The government is looking at subsidising electricity tariffs by around Rs 1.75 per unit to make it affordable at about Rs 4.50 per unit,” he said.

At present, all of the nearly 25,000 MW of operational gas-based capacity is stressed because of fuel supply constraints.

Against a total requirement of 117 mmscmd, gas supply was only 30 mmscmd in 2017. Central Electricity Authority data showed 24,882 MW gas-based stations generated higher than the target in November and in the financial year so far. These operated at a capacity of 24.02% during April-November.

An e-RLNG scheme was launched in March 2015 for two years, but discontinued after two rounds of aggressive bids from companies. Power companies have been urging the government to restart the scheme, arguing that about 7,500 MW capacity is completely stranded while the rest is stressed.