2nd auction on subsidy to gas-based power projs on Sep 15

The government will, on September 15, hold the second phase of auction to give out subsidy support to idling gas-based power plants so that they can buy expensive imported LNG.
Power Ministry has invited technical bids to undertake the reverse auction of Power System Development Fund (PSDF) support to eligible gas-based power plants for a period from October 1, 2015 to March 31, 2016, as per the tender.
Under the plan, liquefied natural gas (LNG) will be imported and cash-strapped state power distribution companies will be financially supported to buy electricity from them.
Power plants rarely use costly imported LNG as electricity produced from the fuel would cost much more than that from a domestic coal-fuelled plant or a domestic gas-fired plant, and there would be no takers for such expensive power.

In the first round, 15 projects were shortlisted through a so-called reverse e-bidding process for supply of electricity to distribution companies that was conducted by state-owned MSTC Ltd.
The auction notice said technical bids will be opened on September 11.

The qualified bidders will be participating in the auction on September 15 for the financial aid, the tender said.
The successful bidders will be given Letter of Award on September 17.
In the May auction, subsidy support helped revive a cumulative gas-based generation capacity of 10,270 MW resulting in generation of additional 5.70 billion units of electricity during June to September summer.

In the first round, government provided a subsidy support of Rs 843.99 crore from the Power System Development Fund to the discoms.
Earlier in May, government revived 10 stranded gas-based power projects under the PSDF scheme.
These plants had successfully bid through reverse e-auction process for generating 5.05 billion units of electricity which will be supplied at or below Rs 4.70 per unit to the purchaser discom during the peak summer months of June 1, 2015 to September 30, 2015, the Power Ministry had earlier said in the release.
Further, this involved the government support of Rs 843.99 crore from the Power System Development Fund to the discoms.

The reverse e-auction for the stranded gas based plants was conducted under the newly approved scheme for utilisation of stranded gas based generation capacity.