A 2022-23 proposal to revive gas-based power plants in India has been put on the back burner by the Ministry of Power for now due to its non-competitive power tariffs.
When asked about the proposal, Union minister for power and new and renewable energy RK Singh told Moneycontrol that pushing for gas-based power does not make sense due to the higher costs involved. He, however, clarified that the government will continue to implement the same model as 2023 of using some amount of gas-based power for peaking and balancing needs.
"There is no reasonable logic for the government to revive or increase gas-based power as of now. This is because the power generated through gas-based stations comes to around Rs 13-14 per unit. At the same time, I am getting electricity through renewable sources at Rs 2.4 per unit. Similarly, we are getting thermal power at around Rs 4. So, making consumers pay for such costly power is a bit too much when we have other alternatives available," Singh said.
Earlier in December, in an interaction with reporters, the Union minister stated that the government will use some gas-based power to meet the country's peaking and balancing needs.
"To meet the peak demand during the summer of 2023, the government had approved a mechanism for operationalisation of around 5000 MW NTPC gas-based capacity during this period. Additionally, the government also tendered to procure another about 4,000 MW of power from gas-based capacity (other than NTPC plants) during this period. The same shall be done to meet this year's summer demand too," he said.
The Central Electricity Authority (CEA), under the Ministry of Power, monitors 62 gas-based power stations with a total generation capacity of 23,845 MW. The requirement of gas for these power plants at 90 percent plant load factor (PLF) is 115 million metric standard cubic meters per day (MMSCMD). But, between April 2022 and January 2023, the total gas available to the power sector was only about 16.14 MMSCMD comprising 13.21 MMSCMD of domestic gas and 2.93 MMSCMD of imported re-gasified Liquefied Natural Gas (RLNG). Data on gas availability post-January 2023 was unavailable at the time of filing this report.
Apart from higher costs, the lack of availability of gas has been the primary reason for these stations not being operational.
While gas, like coal, is also a fossil fuel, India has set an ambitious target of having an installed renewable energy capacity of 500GW by 2030. It also plans to increase the country's coal-fired capacity by 80GW until 2030.
This is being done to meet India's projected peak power demand, which is likely to hit 335GW in 2029-30. In 2023, the peak power demand had touched nearly 241GW, while the government had projected the demand to hit 230GW.
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