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NEW DELHI: The Centre plans to use ‘stranded’, or non-operational, gas-based power plants to meet the high demand for power and avert crises situations during the summer and monsoon months.

Union power secretary Alok Kumar said the government is preparing a pilot for utilizing the gas-based capacity with NTPC for augmenting supply during the peak period—April-May and September-October. The pilot is expected to have a capacity of 2,500 MW.

“We are preparing one pilot initiative for utilizing the gas-based capacity with NTPC for augmenting supply during the peak period that comes for about 15-20 days in April-May and then in September-October," Kumar said.

Demand again surges in September-October and the amount of usable coal also declines as they get wet due to the monsoons.

He said that the project would be ready by April next year.

India has a total gas-based installed power capacity of 24.824 GW, of which 14.3 GW ranging across 31 gas-based plants remains ‘stranded’.

According to the Institute for Energy Economics and Financial Analytics, these plants were built at a cost of almost $8.2 billion, of which banks have funded $6.3 billion.

Major plans to boost gas-based power plants were scuttled by the lack of locally available gas. Further, the power sector is not among the priority sectors for supply of domestic gas.

Now with India’s focus on energy transition and move toward renewables, the government is looking at utilizing the capacity of power plants fuelled by natural gas, another fossil fuel, only to meet demand during the high demand seasons.

Kumar said energy security remains the top priority for the government in the journey toward energy transition.

“Even with the high rates of domestic gas of $6.1/MMBtu in April 2022, gas-based power emerges as the most economical among the other prevailing short-term market options or contracts of less than one-year period, including bilateral trades, trades through power exchanges and through deviation settlement mechanism (DSM)," said the Institute for Energy Economics and Financial Analytics report.

With the recently revised domestic gas prices of $8.57/MMBtu from regular fields utilizing domestic gas would still be cheaper than other short-term options for supply of power during peak hours or grid imbalance with the power tariffs at around 6.2/kWh, said the report added.

Experts said gas-based power plants can also help in providing flexible power and help manage grid balancing while battery energy storage systems in the country are scaled up and become more affordable. The plan to revitalize gas-based plants comes at a time when the global market for liquified natural gas is going through a highly volatile phase amid the Russia-Ukraine war. However, it is expected that prices will ease going ahead.

ABOUT THE AUTHOR

Rituraj Baruah

Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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