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Centre finalises two schemes to revive stranded gas-based power units

Wednesday, 08 Jan 2020
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The Ministry of Power has finalised two schemes to procure 4,000 MW from gas-based power plants to rescue stranded units put up at a cost of about Rs 1,00,000 crore. The schemes include procuring 2,000 MW from gas-based plants through auction and bundling it with an equal capacity of solar power.

Another 2,000 MW will be procured through online reverse auction on a model similar to previous such schemes. A draft cabinet note is being prepared for the two schemes to procure 4,000 MW from the stressed gas-based projects. Under the bundling scheme, the solar capacity will be given priority to run.

Gas-based capacity will run at times when solar power is not available and producers will have the option to sell produce in spot market in times of back down by distribution companies. Both schemes are proposed to be run without subsidy for a minimum of three years.

The other scheme proposes to select bidder through an online reverse auction where bids will be put in by the developers based on incentives to be provided by the central and state governments to reduce end tariffs. Developers will have the option to buy gas on their own or through state-run gas transporter GAIL (India).

The proposed haircuts include waiver of state and central taxes on imported LNG, waiver of GST on regasification and transportation of the fuel, reduction of pipeline tariff charges and marketing margin by GAIL (India).

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