CHENNAI: Due to a hike in natural gas prices, the cost of power generated by State-owned gas power plants has gone up from Rs 3 to Rs 7 a unit and Tami Nadu may have to spend Rs 650 crore more this year to generate power from these plants. State-owned gas power stations generated 1,700 million units of electricity in 2021-22 financial year at a cost of Rs 550 crore.The price of natural gas, which stood at $2 a Btu (British Thermal Units) till March 31, has gone up to $6 on April 1.
A senior official told TNIE that Tangedco has been procuring natural gas from Oil and Natural Gas Corporation through Gas Authority of India Limited (GAIL) under a long-term agreement. “Whether Tangedco generates power or not, we have to pay for gas in accordance with the agreement. We will take steps to reduce this expenditure,” the officer said.
Sources were tightlipped about the duration of the agreement or why the State agreed to buy gas without a cap on price or pay GAIL for the fuel even when it is not using it to generate power.
The five Tangedco gas power stations — one in Chennai Basin Bridge, two in Valuthur, and one each in Kutthalam and Thirumakkottai — have a combined capacity to generate 516.08MW. Of these, Basin Bridge unit generates 120MW using naphtha. Since the cost of naphtha is high, the plant is run only in cases of emergency, sources said.