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Gas Pooling Plan to Revive Power Projects

Published: 26th March 2015 06:00 AM  |   Last Updated: 26th March 2015 03:29 AM   |  A+A-

NEW DELHI:The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a major policy intervention, through an innovative mechanism, to revive and improve utilisation of the stranded gas-based power generation capacity in the country. The gas pooling proposal will revive Rs 60,000 crore worth of investments made in power plants languishing for want of fuel.

The supply of domestic gas to power plants started declining since 2012 and completely stopped from the KG D6 basin, in March 2013. Since then, these plants have either not been operating at all or are being under-utilised. To revive these stranded gas-based plants, the mechanism envisages importing Regasified Liquified Natural Gas (RLNG) for supply to these plants so that they can generate power, the statement said. 

According to government estimates, the gas pooling mechanism will help electricity generation in the country to grow significantly by around 79 billion units, valued at about Rs 42,000 crore.

The mechanism also envisages sacrifices to be made collectively by all stakeholders, including the Central and State governments by way of exemptions from certain applicable taxes and levies on the incremental RLNG being imported for the purpose.

According to the statement, the government also proposes to provide support to discoms from the Power System Development Fund (PSDF) through a transparent reverse e-bidding process that will make the cost of power affordable.

The projects likely to be benefited include installed grid-connected plants of NTPC, Torrent Power, GMR Energy and GVK Power. Gas pooling mechanism will also kick-start the stranded upcoming projects of Reliance Power, Torrent, Lanco and GMR Energy.

Many of the stranded gas based power projects are located in the Southern region.

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