Government wants plans for gas-based plants put on hold

Power project developers have been asked by the union power ministry to not plan projects based on domestic gas until there was clarity about the availability of the fuel.

The ministry's advisory comes as 8,200 MW under-construction capacity, including Reliance Power's Samalkot project in Andhra Pradesh faces the prospect of getting stalled due to gas shortage as production at Reliance Industries's D6 block in the Krishna-Godavari basin drops.

In a recent letter to states, the central electricity authority (CEA), the nodal agency for finalising power sector capacity addition, indicated that as per the petroleum ministry, India's natural gas production was likely to fall by 35 per cent to 27.64 MMSCMD in the next fiscal and go down another 12 per cent to 24.22 MMSCMD in 2013-14.

However, the advisory would not have any long-term impact on the capacity addition programme, as the government had targeted just 1,000 MW gas-based capacity out of 1 lakh MW envisaged under the coming 12th Plan according to analysts. Further there was no certainty about gas supply in any case.

According to Shubhranshu Patnaik, senior director, oil and gas, Deloitte India, the ministry had just removed the uncertainty by issuing the advisory.

India's gas-based generation capacity was 18,093 MW, or 9.5 per cent of the total installed capacity, as on 29 February 2012, and a 6,845 MW gas-based capacity was envisaged during the 11th Plan, which included 1,500 MW Bawana power project in Delhi, Torrent's 1,128 MW Pipavav project and Reliance Power's 2,400 MW Samalkot project. However, several of these projects were still awaiting gas supply and had deferred commissioning schedule pending that.