Lowest price bid of Rs1.42 per unit at LNG subsidy auction1 min read . Updated: 13 May 2015, 01:30 AM IST
14 plants technically qualified to participate in first round of reverse e-auction
New Delhi: Fierce bidding to receive government subsidy to import liquefied natural gas (LNG) for restarting stalled gas-based plants concluded with the lowest price bid of ₹ 1.42 per unit on Tuesday.
Power firms like GMR, GVK and Lanco were in fray for the government subsidy. The bidding round concluded with as many as three participants submitting the lowest price bid of ₹ 1.42 per unit. Of the remaining seven bidders, six submitted financial bid at ₹ 1.44 per unit and one ₹ 1.45 per unit.
In all, 14 plants technically qualified to participate in the first round of reverse e-auction where bidders were asked to quote subsidy in rupees per unit they need so that they can generate power at maximum of ₹ 5.50 a unit.
The auction started at a base price of ₹ 1.74 per unit considering a plant load factor (PLF) or capacity utilisation of 35% of the installed capacity.
The names of winners were not immediately disclosed. This round of auction will entail a subsidy outgo of ₹ 792 crore for the government, said R.N. Choubey, special secretary in the power ministry.
“There shall be no problem selling the power as the distribution companies have already signed the purchase agreements with the bidders," he said.
After stranded power plants, 1.1 mmscmd of gas will be offered to plants that are receiving gas from domestic fields but at sub-optimal levels.
State-owned gas utility GAIL India Ltd and the Gujarat State Petroleum Corp. (GSPC) have been designated importers of LNG, whose delivered price will be reduced by asking importer and transporter to take a cut in marketing and operational cost. The government will provide as much as ₹ 3,500 crore in financial support to the power plants this fiscal and another ₹ 4,000 crore in the next.
The gas-based power stations, which are either shut for want of fuel or are receiving some domestically produced gas and running at sub-optimal levels, are eligible for subsidy to help them buy costly imported LNG.
As many as 31 power stations with a combined capacity of 14,305 MW which are languishing due to want of gas can bid for support from the Power System Development Fund (PSDF) for generating 30% of their installed capacity, called plant load factor, using imported LNG.
Gas-based plants, which were idle between April 2014 and January 2015 for want of gas, are eligible to bid for government support during the auction, said Choubey.