Power plants step up buying natural gas after coal shortage

Power utilities like state-owned NTPC have stepped up natural gas buying in last few days to make up for acute coal shortage at a dozen electricity generation plants in the country.
"In last couple of days, 10 million standard cubic meters per day of additional gas has been purchased by power companies," said B C Tripathi, Chairman and Managing Director of GAIL India Ltd, the country's biggest gas marketer.
The gas purchased is good enough to generate 2,000 megawatt of electricity.
India has 329,226.27 MW of installed electricity generation capacity. Of the total, 25,185 MW is based on gas. Of these, 14,305 MW are technically 'stranded' - fully or partly inoperative due to want of gas at competitive rates.

These plants, where Rs 1.24 lakh crore has already been invested, operated at a mere 22.51 per cent plant load factor, producing 49 billion units of electricity, in 2016-17.
Imported gas is costlier than coal fired generation or even solar now.

But with coal stocks as 12 power plants falling below critical levels, NTPC and other companies have stepped up buying natural gas to supplement production.
According to the Central Electricity Authority (CEA), as on September 7, five power plants had coal stocks of less than seven days. It classified five plants in the super-critical category with coal stocks to last for less than four days of requirement.

The plants with critical levels of coal are in Rajasthan, Uttar Pradesh, Chattisgarh and Madhya Pradesh.
"Natural gas is good to meet peaking load demand. It takes very less time compared to coal for a start-up or shutdown," Tripathi said.
Besides, it is a cleaner and environment friendly fuel than coal.
He said natural gas should be included in the Goods and Services Tax (GST) regime and tax incidence brought down to 5 per cent from current 20-30 per cent to promote its usage.
Crude oil, natural gas, petrol, diesel and aviation turbine fuel (ATF) have been kept of the GST, which has unified more than a dozen central and state levies like excise duty, service tax and VAT.

"That (cutting tax rate) will also aid in government's ambition of moving towards a gas-based economy," he said.