Cabinet gives approval for utilization of stranded gas based generation capacity

Cabinet gives approval for utilization of stranded gas based generation capacity The Cabinet Committee on Economic Affairs gave its approval to a policy to revive and improve utilization of gas based power generation capacity in the country.18 This capacity has been under-utilized due to shortfall in the production of domestic natural gas in the country. The policy will create a mechanism through which Regasified Liquified Natural Gas (RLNG) will be imported to supply to stranded gas plants so that they can generate power. Under this mechanism, the central and state government will exempt the imported RLNG from certain taxes and levies. Gas transporters and re-gasification terminals will reduce their transportation tariff, marketing margin and regasification charges on RLNG. The central government has also proposed to provide support to Discoms from the Power System Development Fund (PSDF) through a transparent reverse ebidding process. With the discovery of domestic natural gas in the Krishna Godavari river basin, the availability of natural gas in the country was expected to increase. This led to the setting up of several gas based power plants. However, the supply of domestic gas to power plants from the river basin started declining in 2012 and completely stopped in March 2013. Since then, these gas based power plants have been under-utilized or not operating. This new mechanism is expected to improve the supply of natural gas to these plants.