Ministry wants more Reliance gas for new projects

The government will now look at allocating more natural gas from Reliance Industries Ltd’s D6 field in the Krishna-Godavari Basin to new power projects, even as the controversy over gas supply to Reliance Natural Resources Ltd is still on.

The Union power ministry has sought an additional 40 million metric standard cubic meters a day (mmscmd) of gas from the ministry of petroleum and natural gas (MoPNG) for new power projects.

“We want to establish about 8,000 Mw of gas-based capacity immediately. We are asking for an additional 40 mmscmd of gas to establish these new projects. There are 37 applications pending in the Central Electricity Authority,” said power secretary H S Brahma. The Anil Ambani-owned Dadri power plant does not figure in the list, he said, adding that the supply to this was before the Supreme Court.

On the basis of allocation, he said the ministry would give preference to Union and state government-owned companies, as “they can put up the capacity quickly”. Besides, projects were being approved on the basis of rate-based bidding, with companies quoting the least rates being awarded power projects.

The final decision on the matter would be taken by an empowered group of ministers (EGoM), expected to be named soon. An EGoM in the previous tenure of the UPA government had framed a gas utilisation policy and fixed $4.2 a unit price for the D6 gas.

Brahma said the new EGoM might also go into the pricing issue again, since the earlier price was valid for only five years. Asked what is the price at which the power ministry expects the gas to be supplied, Brahma said, “Let the government fix the rate.”

The proposals have been sent in an attempt to tide over the prevailing shortage of power due to unavailability of coal and the need to cut carbon emissions. Coal-based power generation in India fell short by over 2,600 million units in the first quarter of the current financial year, largely due to insufficient stocks of the dry fuel at thermal power stations. This, coupled with the delayed monsoon which impacted hydro generation, pushed up the peak power deficit to a historic high of over 12 per cent in the three-month period ended June 2009.

“Governments of a number of deficit states are asking for new projects. Andhra Pradesh has asked for 2,000 Mw of power stations. They have identified new locations and their land and water is ready.

A number of projects are lying idle in Andhra due to unavailability of gas. The government of Haryana also wants to set up 2,000 Mw capacity in Faridabad,” Brahma said.

Currently, gas-based power plants account for around 52 per cent of the overall 151,000 Mw of installed power generation capacity in India. The plan is to set up around 78,700 Mw of additional power generation capacity in the current plan period ending March 2012. Of this addition, gas-based power stations were earlier expected to contribute only 5.3 per cent, or 4,200 Mw.