Major power producers in the private and public sector, including Tata Power, NTPC, Torrent Power and Mahagenco, have opposed the proposal floated by the Association of Power Producers (APP) to pool domestic gas with RLNG (regasified liquefied natural gas). They have opposed the move on the ground that this would lead to higher tariffs.
In its submission to the Central Electricity Authority (CEA) on the gas pooling issue, Tata Power said that its Trombay power station was allocated 1.5 million metric standard cubic metres per day (mmscmd) when ONGC flaring first started. Today, it was getting only 0.7 mmscmd of Administered Pricing Mechanism (APM) gas from ONGC and using 0.3 mmscmd RLNG, thus resorting to pooling at its end. “The regulator is not in favour of hike in tariff due to an increase in the cost of gas. It is difficult to operate gas turbine at 50 per cent PLF (plant load factor) as the minimum threshold of operation is 60 per cent PLF. Mixing of KG-D6 gas with RLNG may be in order but mixing the small quantity of APM gas with RLNG is not advisable,” Tata power submitted.
“Tata Power does not support pooling of RLNG and domestic gas under the present scenario as per which domestic supply is expected to decline further. Any change in fuel will also require revoking PPAs (power purchase agreements) with the concurrence of discoms and re-approval by the regulators after public hearing,” it said. NTPC stated that the pooling of existing gas with RLNG would make the plants completely unviable and even at the present price, there was no offtake of power from these costly gas-based projects which would become costlier with pooling. “NTPC is not in favour of pooling of RLNG with domestic gas and suggests that existing gas allocation should not be disturbed,” it said.
Torrent Power said that by pooling and distributing the available domestic gas to all the projects would make all the plants operate at a very low PLF which was not advisable as O&M (operation and maintenance) cost would go up and auxillary consumption would also go up. Therefore, supply of gas to the existing stations must not be disturbed. It will also increase the transportation costs and taxes and involves re-negotiation of contract with GAIL and discoms. Torrent said it was not in favour of pooling till domestic supply was increased considerably and RLNG is available at a cheaper rate.
However, GMR and Lanco expressed a strong desire to pool domestic gas with RLNG and felt that modalities could be worked out.