Government has asked power producers to refrain from setting up new gas-based plants as dwindling fuel supply is threatening viability of 37,000-MW of existing and upcoming projects.
The power ministry has issued an advisory to developers for not planning projects based on domestic gas till 2015-16. The directive signals that no further gas-based power generation capacity would be considered for allocation until existing gas demand is fulfilled.
Gas production from Reliance Industries' KG-D6 basin is likely to go down by 15.03 mmscmd in 2012-13, and additional 3.42 mmscmd in 2013-14, against the availability of 42.67 mmscmd of gas in 2011-12.
Oil ministry has not given any projections for 2014-15 and 2015-16, the advisory said.
"It is evident that no additional domestic gas is likely to be available till 2015-16, hence developers are advised not to plan projects based on domestic gas till 2015-16," it said. Association of Power Producers director general Ashok Khurana said there is no rationale in setting up new capacity till fate of existing investments are clear.
"The government has issued the advisory to power companies. About 28,000 MW of existing power projects are operating at sub-optimal capacity of about 50-55%. If no action is taken by next year operational capacities will fall to 44%, making the projects economically and financially unviable," he said.
The power producers' association has demanded importing R-LNG and pooling with domestic gas to bring down prices.
Khurana said gas pool is the only viable option as it ensures adequate availability of reasonably priced gas to power sector.
The association has also demanded diversion of gas by cutting supply from ONGC and other sources to non-core sectors such as steel, refineries, metals and petrochemical units.
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