India cuts gas power capacity as idle plants turn permanently unusable

By Rajesh Kumar Singh and Rakesh Sharma 

India has phased out about five gigawatts of gas-fired power capacity that became inoperable after being left idle for years, according to people familiar with the matter. 

Some of the plants had sold off machinery, while others had become so rusty they were no longer fit to use, the people said. They asked not to be named as they are not authorized to speak to the media. 

India’s gas power industry has struggled for years, largely thanks to high prices which made plants uncompetitive, complicating the government’s goal to more than double the share of the fuel in the energy mix by 2030. In the year through March, India’s gas-fired generators ran at an average 14.5% of their capacity. About 7 gigawatts of projects in the southern region clocked a utilization rate of below 4%. 

 

The power ministry didn’t immediately respond to an emailed request for comment. 

The nation’s gas fleet totaled 20.1 gigawatts in April, compared with 25.2 a month earlier, data from the power ministry’s Central Electricity Authority show.  

Lower gas power capacity has raised other challenges for India, including making it harder to meet summer electricity requirements. This is especially true during warm evenings, when nearly 107 gigawatts of solar capacity goes off grid and demand soars as air-conditioners remain switched on. 

The highest number of closures were recorded in the south-eastern state of Andhra Pradesh, where a string of gas power projects had been counting on fuel supplies from Reliance Industries Ltd.’s KG D6 field in the Bay of Bengal.  

The company had expected to produce 80 million cubic meters a day of gas from the site, but production peaked at 55.9 million cubic meters a day in the fiscal year 2011, and began to slide thereafter. It plunged to a low of 0.9 million cubic meters in 2019. Output has recovered since but is still at half of peak levels.