Notwithstanding an assurance by the Centre on supply of gas, the fate of the 1,500 mega watt capacity Bawana power plant in New Delhi is still hanging in balance following refusal of Reliance Industries Ltd to supply fuel to the plant, built at a cost of Rs. 4,500 crore.
Ending months of uncertainty, the Centre had earlier this month conveyed to Delhi Government that it will arrange gas for generation of 750 mega watt of power out of the plant's total capacity of 1,500 mw.
But power generation at the plant remained uncertain, with Delhi government saying that it will not be able to afford imported fuel even if the Centre arranges it.
The Centre had allocated 0.93 million cubic meters per day of gas (mmcmd) from Reliance's Andhra offshore KG-D6 fields for the Bawana plant for 2009-10 and 2010-11.
However, Delhi government could not sign the Gas Sales Purchase Agreement with Reliance Industries Ltd due to delay in the Bawana project and the gas was allocated to other entities by RIL.
The RIL sells KG-D6 gas to users like fertiliser units and power plants at government-fixed rate of $4.2 per million British Thermal Unit.
But in absence of KG-D6 gas, the only option left for Delhi Government to use imported LNG for Bawana which will cost three times the price of Reliance gas.
"We will not be able to afford imported gas for Bawana plant as imported gas would be very costly," said a senior official of Delhi government.
However, the official said the Centre may offer gas at domestic price for generation of 750 MW of power while Delhi government is still clueless about gas for production of remaining 750 MW of power.
Pragati Power after synchronising two gas-fired turbines of 250 MW each in April approached Reliance to sign the contract.
But Reliance said it was in not in a position to sign any fresh contract since output from its field has dropped to about 47 mmcmd, far less than from the 58 mmcmd for which it has already signed supply contracts.
The 1500 MW capacity Bawana power plant is being built by the Delhi government with an investment of about Rs. 4,500 crore and three turbines out of the total six have already been synchronised. The construction of the third turbine has been completed this month.
The city government last month had sought intervention of the Prime Minister's Office to help get natural gas for the plant following refusal of Reliance Industries Ltd to supply the fuel.
Pragati Power has already told the Centre that running the Bawana plant in open cycle with liquefied natural gas (LNG) would be "highly uneconomical".
LNG, sourced at Dahej in Gujarat, can be supplied by state gas utility GAIL India Ltd but will cost around $12 per mmBtu.
The Bawana plant's foundation stone was laid by Prime Minister Manmohan Singh in March 2008.
The plant was scheduled to be ready well ahead of last year's Commonwealth Games in October but missed the deadline.