New gas-fired power plants likely to come up this year

New gas-fired power plants with a capacity of over 3,150 mw are likely to come up this year but there's no gas available, worsening the fuel crisis in the sector. Already, coal-based plants are suffering as state-run Coal India is unable to step up production significantly because of environmental restrictions on new mines. Coal-based plants with capacity of 17,000 mw are likely to be stranded because of fuel shortage.

The power ministry has asked the petroleum ministry to immediately allocate 16.2 million metric standard cubic metres a day (mmscmd) of natural gas for eight projects, including Torrent Power's projects at Dahej and Sugen and Reliance Power's Samalkot unit. "The allocation of gas to these projects is still awaited, which may adversely affect the testing and commissioning of the project and capacity addition programme of this ministry," the power ministry said in a note to the petroleum ministry.

The government had earlier asked the Central Electricity Authority to submit a list of private power projects that would definitely be commissioned in the 11th Plan period so that fuel arrangements could be made. The CEA prepared the list of projects after site visits. Power plants would be in the queue for gas, particularly from new fields. Officials said staterun ONGC will start production of 2 mmscmd of gas from its offshore fields shortly. Some other exploration blocks are also likely to start production in the coming years.According to government estimates , domestic supply of natural gas, which was 145 mmscmd at the end of 2010, is expected to rise gradually to 200 mmscmd by 2015. Gas imports are likely to jump to 187 mmscmd from 26 mmscmd over the same period as LNG terminals expand capacity . For power plants, meeting base-load demand from imported LNG is not a viable option. So far, the power ministry had recommended allocation of 56 mmscmd of natural gas for power stations, of both private and state-run firms, with a total capacity of 669 mw.

India's natural gas supply has fallen as output from the country's biggest field, Reliance Industries' D-6 , fell sharply last year, forcing the government to cut supplies to consumers and triggering a legal battle from buyers who were denied supplies after signing firm contracts. In fact, the fuel problem is uppermost on the agenda of power producers. "The coal ministry says there is no coal available, the ministry of petroleum and natural gas says that there is no gas available, what do we do?" said the chairman of a state-run power producer. Officials said the government has virtually ruled out construction of any new gas-fired power station in the next Five-Year Plan because of the acute shortage of natural gas.