No new policy or support needed by gas-based power plants: Govt
The government decides that the gas-based power generation sector in the country needs no new policy or support at the moment – looking at the growth of the sector without any support, and in the light of states being reluctant to provide waivers…
The government on February 2, 2021, informed the parliament, that it has decided not to bring any new policy at this time or provide assistance/support to the gas-based power plants in the country.
It was also pointed out that the states have been reluctant to provide waivers or concessions to these gas-based projects, still, the sector has been able to achieve decent growth in recent past.
Earlier in 2015-16 and 2016-17, the Government of India has approved an e-RLNG (e-auction for Re-gasified liquefied natural gas) for the use of gas-based energy generation capacities.
The scheme was launched for the purpose of reviving and improving the use of the gas-based power capacity in India. The scheme envisages the supply of imported spot RLNG through stranded gas-based plants as well as domestic gas receiving plants through a reverse e-bidding process.
The scheme envisages waivers and concessions to be made collectively by all stakeholders, including state governments and has received support from the Power System Development Fund (PSDF). On 31 March 2017, the scheme ended.
States Reluctant to Provide Waivers
Power Minister RK Singh in a written reply in the Rajya Sabha stated that in the view of states reluctant to offer any kind of waiver/concession along with the fact that gas-based power generation sector has witnessed a decent growth without any support; the government has come to a conclusion that no new policy may be required as of now to provide assistance to gas based power plants in the country.
The minister also informed the House, that the government has examined the proposal for the revival of the e-RLNG scheme to extend support to the gas-based power plants. In this regard, the state government’s views regarding the waiver and concessions of state government taxes and levies have also been sought.
However, the state governments have expressed their opinion that, under the current scenarios, proposed concessions/waivers for the revival of gas-based plants are not feasible/viable. Also, the state governments are not in favor of a GST exemption on the transportation of the gas scheme”
The Minister also explained that as the gas prices are declining since last year, this has helped the gas based power generation segment register growth without any support due to the lower price of LNG.
He pointed out that the gas based power generation segment’s plant load factor (PLF or capacity utilization) in August 2020 has risen to 26.64% from that of 22.15% in 2019-20, despite the reduction in demand due to COVID-19 pandemic.
India currently has around 24 GW of stranded gas-based assets, as per industry estimates.
