gas power plantThe Central government is working on a scheme to salvage 24,000 MW of stressed gas-based power plants. These plants have been built at an investment of over Rs one lakh crore, by importing natural gas and bundling the output with cheaper solar energy. The Centre has shelved the scheme entailing subsidy.

The proposed new scheme will offer no subsidy and hopes to help operate the power stations at 90 percent capacity by selling the bundled power. Bundling of solar power with an equal amount of gas-based power is expected to result in lower cost of production than blending domestic and imported gas-based power.

PTC India has been asked to work on the proposal. The gas is proposed to be imported by GAIL (India), with concessions and haircuts by the Central and state governments, power companies and gas transporters to make it affordable. GAIL (India) has indicated to the Ministry of Power that it can import LNG for about USD six per unit, and deliver it to power plants for USD eight a unit, which includes re-gasification, transit and taxes.

With this, power can be generated at around Rs four per unit. The Ministry of Power’s plan is to blend this with the assumed average renewable energy cost of Rs 2.75 per unit, expecting the blended rate will find enough takers among distribution companies under the merit order despatch rule. Power companies have been demanding government intervention as about 8,000 MW capacity is stranded while the rest is stressed.


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