NEW DELHI:The government has discontinued a two-year-old scheme under which it offered imported gas at subsidised rates to stranded and underutilised gas power projects. But the government is open to resuming the programme if all stakeholders wanted it back, power minister Piyush Goyal said.
ET had on February 19 reported that the power ministry was unlikely to extend the scheme that covered power projects with a combined capacity of 24,000 MW.
Industry associations had made representations to the ministry for extension of the scheme that ended on March 31 and state-run gas transporter GAIL India too had made the same request. However, state governments that participated in the programme to revive private and state-sector plants withdrew from it, a senior ministry official said.
“In the backdrop of low gas prices and state governments withdrawing from the scheme, we have decided not to extend the scheme,” the official said. “The scheme is being discontinued but if there is interest from all sides, we can resume it,” Goyal told media persons last week.
The scheme for importing spot regassified LNG was started in 2015-16 for stranded gas-based power plants and plants receiving inadequate domestic supply of the fuel. The Power System Development Fund provided financial support under the programme. Companies that got gas in three rounds of auction under it include NTPC, Ratnagiri Gas & Power, Torrent Power, GVK Industries, Lanco Kondapalli, GMR Energy, Gujarat State Electricity Corp and CLP India.
Under the scheme that was meant to make gas affordable, state government were required to forego some taxes. Also, gas transporters and import terminals had offered discounts on charges for their services.
The power ministry auctioned the rights for companies to source gas under the scheme. The first two rounds of auction were to supply gas from June 2015 to September 2015 and from October 2015 to May 2016. Under those, the bidders had to indicate the total incremental electricity they would generate by using the gas sourced from the e-bid and quote the subsidy requirement. In the third round of auction held in March 2016, for supply from June that year, bidders had agreed to forego the subsidy.
The Association of Power Producers had recommended continuation of the scheme for two more years, arguing that it would be at zero cost for the government as subsidy determined in the third round was negative, meaning producers were ready to pay a premium instead of taking a subsidy.
Source: economictimes.indiatimes.com