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Boost for power plants as govt clears fresh gas supplies

business Updated: Aug 24, 2013 08:30 IST
HT Correspondent
HT Correspondent
Hindustan Times
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In what will provide some relief to the gas-starved power sector, the empowered group of ministers (EGoM) under defence minister AK Antony on Friday decided that any surplus natural gas left after meeting the needs of the fertiliser sector (urea plants) would go to gas based electricty generating plants.

"At present, the fertiliser sector receives 31 million standard cubic metres per day of gas from domestic production and any additional gas beyond 31 mmscmd will be given to power," power minister Jyotiraditya Scindia told reporters here after the meeting of the EGoM.

Power projects will get the surplus gas until March 2016, after which the situation will be reviewed, Scindia said. The decision will benefit projects with a combined capacity of over 7,800 MW, he said.

"There are about 12-14 mmscmd of gas which in the next three years will come to the power sector," Scindia said when asked to quantify how much gas the power sector would get.

The EGoM also cleared new bidding norms for setting up ultra mega power projects (UMPPs). A UMPP involves one with a capacity of 4000 mw and more. A UMPP is a project with a capacity to produce 4,000 mw or more of electricity.

Under the new norms, the ownership of UMPPs will remain with distribution companies, while qualified bidders will be contractors, and developers will be barred from importing equipment for the projects.

The power ministry had, however, proposed considering gas-based power plants in order of priority sector. However, the EGoM did not change the order of priority for gas allocation and the fertiliser sector remained as the priority sector. Gas supplies to power sector are zero since March 2013.