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'Pool domestic, imported gas to lower cost'

Pool domestic, imported gas to lower cost
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In order to tackle the problem of scarcity of fuel at gas-based power stations and bringing down its average cost, private power producers have requested the government to pool domestic and imported natural gas.

'The dwindling KG-D6 production is likely to lead to gas based power plants running on PLF (plant load factor) of only 30 per cent by 2015, rendering them technically inoperable,’ said Ashok Khurana, director general, Association of Power Producers, in a letter (Dated May 11) to the minister of petroleum and natural gas S Jaipal Reddy.

PLF is the efficiency of a power plant.

'We have requested for gas pooling with the available domestic sources and imported R-LNG (re-gassified natural gas) which appears to be the only feasible solution to rescue the gas based capacity in the country,’ Khurana said.

'Price arbitration benefit between domestic and imported gas sources would be brought about through pooling... it is imperative that the domestic gas prices are kept low and not increased in order to ensure that power costs do not increase any further,’ he said.

The industry is of the view that the biggest challenge before power projects developers is to secure adequate and appropriately priced fuel to keep the power costs affordable.

The rupee depreciation has also had a direct increase of 35 per cent on the cost of gas-based power, thereby increasing power tariffs by around 44 paise per kilowatt hour, Khurana said.

This can have a significant impact on the various discoms in the country, which are already reeling under the impact of under-recoveries and poor financial situation, he added. Association of Power Producers (APP) is a body representing the private power producers in the country.
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