Gas pooling may benefit only plants on grid

Those connected with this grid are currently operating at less than 24% plant load factor

The government move to provide relief to stranded gas-based power generators could be limited to only those on the gas pipeline grid. A senior government official said the pooled gas would be pumped into the pipelines so that it can be accessed by the plants along that grid.

Gas grid-connected power plants currently have a generation capacity of 16,374 Mw. With gas shortage hovering around 72 million standard cubic metres a day (mscmd), these units are operating at less than 24 per cent plant load factor. "Gas-based capacity of around 2,000 Mw is currently off the grid. This capacity is being fed through localised gas production," said the official. In states like Tripura and Assam, for instance, gas is utilised locally to generate power. These power plants are able to function 56 per cent plant load factor.

Generation capacity of gas-based power plants is expected to rise by 24 per cent to 24,189 Mw once units under construction are commissioned. With availability of gas becoming a problem, the ministry of power had last year issued an advisory in March to the developers asking them not to plan projects based on domestic gas till 2015-16. "The gas pooling being worked out will cover only the existing projects and those under construction. This capacity works out to 26,300 Mw. This requires 102 mscmd of gas. But only 18 mscmd is available from all sources," said Ashok Khurana, director-general, Association of Power Producers (APP).

Like in the case of Coal India Ltd, which has been entrusted with the task of providing coal to power plants through a mix of imported and domestic coal, the power ministry has proposed government-controlled GAIL India as the pool operator. Unlike coal pooling mechanism where accessibility was not a restricting factor, gas pooling, however, would be restricted since gas requires pipeline connectivity for transportation. According to GAIL India, the biggest gas marketer in the country, the pipeline network in the country is 11,900 km, with a design capacity of 283 mscmd.

To get over the issue of high cost of power generation from natural gas, the ministry of power is also seeking subsidy from the government. Union power minister Jyotiraditya Scindia had last week said his ministry had sought Cabinet approval for the gas pooling policy. He said power sector could absorb a gas price of $5 per mBtu. "Any gas supplied beyond $5 per mBtu (million British thermal unit) will be unviable," the minister told reporters.

According to the power ministry, a subsidy of around Rs 2,498 crore would be required for a capacity of 16,374 Mw if they generate 14,224 million units (kilowatt an hour) for four months this year. This subsidy amount is expected to rise to Rs 10,892 crore for 19,374 Mw capacity generating 57,480 million units.

In its proposal to the Cabinet Committee on Economic Affairs, the power ministry also proposed an empowered committee under additional secretary in its ministry to finalise plant-wise supply of gas for each month. Besides, the committee that would have representation from the ministry of petroleum, GAIL and the Central Electricity Authority would also decide on a pooled price and procurement of regassified liquefied natural gas every month.