The Ministry of Power has stipulated that for the 12th Plan period, in view of the substantial supply constraints expected, domestic gas would be allocated to meet only 60% of the total gas requirements of all power projects. The remainder would have to be tied up through imports or retail contracts.- Notably, the power sector, over 2012-2017, needs at least 90 mmscmd of additional supplies to operate its new capacity at a 70% PLF. At present, the total allocation of domestic gas to the power sector stands at 79 mmscmd.
- In addition, the power ministry has asserted that supplies can begin only after the developer has executed Power Purchase Agreements (PPA) corresponding to at least 85% of the 60% of the total project capacity (in effect 55.25% of project capacity).
- The duration of such PPAs will need to be for at least 5 years, corresponding to the periodicity of the relevant Gas Sale and Purchase Agreements (GSPA), which are also normally executed for 5-year period. PPAs would be co-terminus with the GSPAs, if reviewed and renewed in the future.
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