Revival of 2,700 Mw of stranded gas-power capacity in AP on cards

Stranded gas-based power generation capacity totaling 2,700-Mw in Andhra Pradesh is expected to be restored under a mechanism announced last month by the Centre targeting their revival through a mix of imported LNG supply and a subsidy grant.

Gas power projects with a combined capacity of about 6,350-Mw remain unutilised for want of fuel in the state, constituting 45 per cent of the total 14,000-Mw stranded capacity in the country. About 9000-Mw of the total stranded capacity in the country is slated to be utilised under the Union government’s scheme.

Imported gas would be allocated to these projects for generation of power on a reverse bidding basis, which begins at Rs 5.50 wherein a grant in the range of Rs 0.94 paise to Rs 1.20 per unit would be offered from the Centre’s Rs 3,500-crore Power Systems Development Fund.
 

Andhra Pradesh, which is expected to have 8-10 per cent surplus availability of power in the current year, is already making efforts to increase the demand in a bid to absorb the additional power.

“We would be in a difficult situation if the 20 per cent demand growth target is not achieved this year,” Ajay Jain, secretary, energy department, said at a seminar organised by the Independent Power Producers Association of India.

With the 2,600-Mw of additional thermal power, coming by the way of 1600-Mw super critical project of APGenco at Krishnapatnam and 1,050-Mw Hinduja power project in Visakhapatnam, expected to hit the grid anytime soon, authorities have little clue as to what to do with the supply from the stranded capacity in gas-based power.

As the AP government had actively lobbied for the revival of stranded gas power capacity in the state, it has little choice to say anything about it now, according to the energy department official