POWER

Power ministry wants levies on LNG value chain to be removed

Price of liquefied natural gas (LNG) has been sliding in the world markets since January 2019 – about 40% – but that doesn’t seem to raise the capacity utilisation level of India’s gas-based power plants, most of which are stressed. According to sources, even such a big fall in LNG prices hasn’t made the domestic, gas-based power units viable and attractive for discoms to buy electricity from.

“Cost of gas, which includes landed cost of LNG imports, regasification and transportation costs, is still high and uncompetitive in relation to coal-based plants,” a source said. Domestic gas production has plummeted over the years. Reliance Industries’ KG DG gas output, which peaked at 69.43 million standard cubic meter per day (mmscmd) in March 2010 is now stagnating at abysmally low levels, with the asset at “late life stage”.

As much as 24,900 mega-watt of gas-based power stations continue to operate at very low utilisation levels (see chart); in fact their plant load factor has declined in recent months. Though touted as one of the cleanest source of reliable power, the share of electricity from gas-based power plants remain less than 4%.

Source
financial express
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