Gas allocation policy may favour new projects

The central government may reserve up to 30 per cent of gas for the greenfield power projects in the new gas allocation policy which will govern the next round of gas allocation.

The greenfield projects will get priority over expansion and redevelopment projects. We have also decided to reserve 30 per cent of the allocation for independent power plants, said a senior government official.

Work on the gas linkage policy was started in December 2009. The policy is going to largely follow the norms laid down in the coal linkage policy approved earlier by the government.

While the coal linkage policy gives priority to power projects being developed by state-owned companies like NTPC, it requires the companies to start new projects to get coal allocation. If a similar measure is adopted in the gas linkage policy, NTPC will find it difficult to get gas for its existing gas-based power plants.

However, other players like Reliance Power Ltd, GVK Power and Lanco Infratech would be the beneficiaries of such a policy as they are coming up with greenfield gas-based projects. The gas linkage policy will also have a point system in which project developers would get weightage on the basis of getting environment, land and water clearance from the concerned departments.

We want to allocate gas to only those plants that are likely to come up within 2-3 years of gas allocation. So, if a project is running behind schedule in getting clearances for its projects, it may not be allocated any gas, he added.