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Gas pool likely to fuel power plants ready for generation

Source: Financial Express, 5th September, 2011

New Delhi The government proposes to offer gas for all power projects to be completed in the current Five Year Plan by creating a pool of domestic gas and imported re-gassified liquified natural gas (RLNG). The new mechanism will not only ensure that gas is available to meet around 80% of the requirement of these power plants, but also provide fuel to them at competitive rates as pooling will help moderate RLNG price.

While average domestic gas price is around $4.2 per million British Thermal unit (mmBtu), RLNG costs over $15 per mmBtu.

There are 10 power projects with a total capacity of 7,919 MW scheduled for commissioning by March-end 2012, but availability of gas to them is uncertain as production from country's biggest reserve, Reliance Industries' D6 block in Krishna Godavari basin has fallen sharply.

The government's move will benefit Reliance Power's 2,400 MW Samalkot project, RVK Energy Pvt. Ltd.'s 436 MW gas project, Panduranga Energy Systems' 100 MW project, Torrent Power's 1200 MW DGEN project and GSPC's 700 MW Pipavav Power, among others.

On Friday, Prime Minister Manmohan Singh expressed concern over the sluggish pace of commissioning power projects at a review meeting of various ministries, directing that fuel-related issues be resolved at the earliest. At present, domestic gas is allocated only to existing power projects stranded due to gas shortage and a small quantity is given to new projects commissioned in 2009-10.

Projects under implementation and development have not been allocated fuel.

According to the proposal being considered by the government, pooling may be done by combining gas and RLNG in a 3:1 ratio to meet 80% of the requirement of power plants. Pooling will bring down the cost of fuel to the power plants to $7-8 per mmBtu.

This is a welcome move as it will allow us to get fuel at competitive rates and help us keep power tariff low. It will also end uncertainty and protect thousands of crores of project investments," said an official of a leading private sector power company, asking not to be named.

For the proposed gas pool, government is considering to tap gas produced by state-owned ONGC and Oil India from the nominated fields. A portion of gas going from these fields to non-priority sectors such as petrochemicals and steel will be diverted for use by priority sectors such as power and fertiliser.

Of the 55 million metric standard cubic metres a day (mmscmd) gas produced by the two state-run companies from nominated blocks, the government will be able to free up about 10-15 mmscmd gas for use by new power plants. This will enable these power projects to get gas to run plants at close to 60% of their rated capacity. The balance will come from imported LNG.

The oil ministry has already directed RIL to meet the natural gas requirement of priority sectors first before giving the clean fuel to others from its KG D6 block. KG production has dipped below 45 mmscmd against an expected production of 80 mmscmd, leading to less-than agreed gas availability for all existing gas projects. Now, the power sector gets about 25 mmscmd and the fertiliser sector gets about 15 mmscmd of gas from nominated fields at an administered price of $4.2 million metric British thermal units. What remains of the 55 mmscmd APM gas goes mainly to consumers having allocations less than 0.05 mmscmd. A few buyers covered under certain court orders also get APM gas.

Gas allocation for these new projects could give a fresh lease of life for the capacity addition programme of the government which is is already far short of the 11th Plan target. In the current Plan, government planned to add 62,000 MW of new generation capacity but the Plan is expected to end with just about 45,000 MW. Gas for new projects could add another 8,000 MW of generation capacity.

Gujarat State Energy Generation's 350 MW project at Hazira, Pragati Power Corporation's 1,000 MW Bawana power project, Lanco's 740 MW Kondapalli Phase III, GMR's Vemagiri expansion project, Uttarakhand's Kashipur project are also expected to benefit from gas pooling.

In May, the petroleum ministry passed an order order asking RIL to fully meet the contracted gas supply to priority sectors like fertilizer, LPG, power and city gas distribution in spite of the fall in gas production from the D6 field. Considering the shortfall in output, the ministry allowed RIL to make pro rata cuts in supply only in the case of remaining sectors like steel and petrochemical producers and refineries.

Solar power plants in Rajasthan to get water from Indira Gandhi Canal

Source: Economic Times, Aug 3, 2011

JAIPUR: The Rajasthan government has directed Indira Gandhi Nahar Project (INGP) to facilitate water supply for five solar power companies signed up under National Solar Mission. INGP will release 12 cusec after signing up water agreement with these companies which together will generate 400 MW. Apart from that, INGP has already reserved 400 cusec for solar plants proposed to come up alongside the canal region.

"We are in the process of signing water agreements with solar projects approved under National Solar Mission. We will provide water to companies which have got approvals from state government," said INGP chief engineer Birdhi Chand.

Among these companies Rajasthan Sun Technique Energy Pvt. Ltd., KVK Energy Ventures Pvt. Ltd. and Diwakar Solar Projects will set up solar thermal plants of 100 MW each while Corporate Ispat Alloys Limited and Godawari Power and Ispat Limited will come up with 50 MW each in Jaisalmer district.

Apart from these solar thermal projects, Rajasthan has also got 21 solar photo voltaic (PV) with a total capacity of 105 MW. Rajasthan power minister Jitendra Singh told ET that the state envisages to create solar power generation capacity of 10,000 to 12,000 MW in the next 10-12 years. "We have plenty of barren land in western districts of the state such as Jodhpur, Barmer and Jaisalmer which can be available at Rs 10,000 per acre for solar power project developers. We expect to pull lot of investment in this field," he said.

The state receives solar radiation in the range of 5.5 to 6.8 kWh per sq. m. According to an estimate, there is a whopping 1.5 lakh MW untapped potential of solar energy in this part of the country. On an average about 35-MW capacity solar plants can be installed on 1 sq. km. area in the state.

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