Power generation stocks in demand

Shares of eight power generation firms rose by 0.19% to 2.17% at 11:23 IST on BSE after partly stranded five gas based power plants successfully bid through transparent reverse e-auction yesterday, 13 May 2015.

JSW Energy (up 2.17%), Reliance Infrastructure (up 1.17%), NTPC (up 1.09%), NHPC (up 0.79%), Tata Power (up 0.48%), Torrent Power (up 0.39%), GMR Infrastructure (up 0.20%) and Reliance Power (up 0.19%), edged higher. Jaiprakash Power Ventures (down 0.36%), CESC (down 0.48%) and Adani Power (down 0.73%), edged lower.

The BSE Power index was up 0.05% at 2,025.96. It outperformed the BSE Sensex, which was down 0.49% at 27,118.07.

The government announced the revival of partly stranded five gas based power generation plants which have successfully bid through a most transparent and competitive reverse e-auction process for generating 644 million units of electricity which will be supplied at or below Rs 3.39 per unit to the purchaser Discoms during the peak summer months from 1 June 2015 to 30 September 2015. This will involve government support of Rs 119.99 crore from the Power System Development Fund, the Ministry of Power said in a statement yesterday, 13 May 2015.

The grid connected gas based power generation capacity in the country is 24,150 MW. Of this, a capacity of 9,845 MW had supply of some domestic gas and is currently operating at an average PLF of 32.2%. These comprise 23 plants of which only 6 plants have a PLF higher than 35%. Thus 17 plants with a PLF of less than 35% were eligible to participate in the auction process held today, the statement said.

In the auction held yesterday, 13 May 2015, 8 plants with a cumulative installed capacity of 4,872 MW participated in the Technical Bid round and all were declared as Technically Qualified. The auction was meant to determine the plants which were seeking lowest per unit support for sale of power to Discoms, it added.

Auctions held on Tuesday, 12 May 2015, (for Stranded Gas Based Plants) and yesterday, 13 May 2015, have resulted in revival of a cumulative gas based generation capacity of 10,270 MW resulting in generation of additional 5.70 billion units of electricity during the peak summer months from 1 June 2015 to 30 September 2015. Further, this will involve government support of Rs 843.99 crore from the Power System Development Fund to the Discoms, the statement said.

The reverse e-auction for the Stranded Gas based Plants was conducted under the newly approved Scheme for Utilization of Stranded Gas Based Generation Capacity, it added.

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