KG D-6 Gas a boon for Indian power sector

Gas from KG D-6 field is generating 4,745 MW of power benefitting 15 million households & about 60 million people and saving of over Rs 5,400 crores to consumers. 

Supply of natural gas from KG D-6 gas has come as a boon for Indian power sector, which was severely suffering due to the unavailability of natural gas. Unavailability of natural gas had forced Indian power generators to use costlier liquid fuels like naphtha and fuel oil. With the production of gas from KG D-6 gas starting in April, last year, the present gas demand-supply deficit for power sector has been met. Apart from helping generate more electricity with the availability of additional KG D-6 gas, the cost of power generation also comes down on account of cheaper KG D-6 gas compared to other fuels, thus saving large sum of money for the power sector. 

The volume of gas sold from the KG basin during the year 2009-10 was about 6387 mmscm or about 18 mmscmd. To estimate the impact of KG D-6 gas on Indian power sector, it is assumed that a 1000 MW power plant needs 3.78 mmscmd at 90% PLF. Therefore, 18 mmscmd of KG D-6 gas would have helped roughly in generating nearly 4,745 MW of power. This further implies generation of 37.41 Billion KWH assuming a PLF of 90%. This accounts for nearly 33% of India’s peak demand and 4% of total gross consumption (India's consumption is 800 Billion KWH or about 612 KWH per capita with a peak deficit of 112 Billion KWH). Since the per capita consumption is 612 KWH, power from the KG basin gas of 37.41 Billion KWH has served the needs 15 million households or about 60 million people. 

The cost of power generation from KG D-6 gas is also lower vis-à-vis alternate fuels like naphtha implies an annualized savings of approximately Rs. 5400 crores for consumers. Assuming naphtha price of $10/mmbtu, the cost of power generation from naphtha would be Rs 3.97 per unit. Comparatively, assuming a delivered price of $6/mmbtu, the cost of generation from KG D-6 gas would be Rs 2.50/unit. Hence, the saving per unit would be Rs 1.47 per unit. Since the average household consumes 2448 KWH per year, savings per household would be to the tune of Rs 3,599 per annum or Rs 300 per month.  Since, 15 Million households will benefit from this power; it would imply net a savings of Rs 5400 crores or $1.2 Billion to the consumers.