Upcoming power projects in 15 coal-starved states to get gas first

NEW DELHI: The Central Electricity Authority, or CEA, has proposed priority gas allocation for power projects coming up in coal-starved states and suggested that generation companies should be given the freedom to choose the location of these plants.

Coal and gas linkages to power projects are based on recommendations made by CEA.

The proposals, if accepted by the power ministry, will lead to a revision of the existing policy, which does not give fuel on priority to any project and requires generation companies to set up plants within a 50 km radius of an existing or proposed pipeline.

"We have realised that preference should be given to land-locked and coal-starved states, like Delhi and Uttar Pradesh, as they do not have any means to generate electricity," a senior CEA official said. "The present system needs revision to help about 15 such states. Proposed projects in these states should be given bonus points straightaway."

CEA has also suggested that projects proposed to be commissioned between 2012 and 2017 should be granted gas linkages even if they are not located within the stipulated distance from a pipeline. However, the required infrastructure for fetching gas to the project should be built by the developer at his own cost, CEA said.

Earlier, the government had accepted CEA's recommendations and created a stiff grading system to discourage non-serious private firms seeking gas for power projects due for commissioning after April 2012.

The system would still rate companies based on progress in land acquisition, water allocation, financial background and equipment sourcing contracts for gas linkages.

The power ministry would take a view on the proposals after it receives additional gas allocations, a senior official in the ministry said.

"The indicated availability of gas up to 2015-16 is only around 60 million metric standard cubic meters per day (mmscmd)," he said. "That gets exhausted with the present proposals. So, we have asked CEA to shortlist projects and keep the list with itself till additional availability of gas is indicated by the petroleum ministry."

CEA has received 104 applications so far from government and private project developers seeking gas to generate nearly 118,000 MW of power in the 12th Five Year Plan. The projects would require gas supply of 570 mmscmd at 90% plant load factor.