Passage Cleared Towards Revival of Nine Gas Power Plants

At last some good news for gas-based power plants in the country which have been reeling for last several years for non-supply of gas for the power plants. In a major development, 9 gas based power generation plants with an installed capacity of 5942 MW is now up for revival by the government. Importantly these plants were stranded for no supply of gas for so many years but now they have been successfully bid through a transparent and competitive reverse e-auction process. “After revival these plants would generate 6.79 billion units of electricity which will be supplied at or below Rs 4.70 per unit to the purchaser Discoms during the period from 1st April 2016 to 30th September 2016,” power ministry source informed. In an auction process, 9 plants emerged as preferred bidders and have been allocated 7.62 MMSCMD e-bid RLNG. 

Re-auction led to aggressive negative bidding with the lowest bid at Rs 0.03 per unit. As a result, there is an estimated savings of Rs 18.29 crore to Government’s Power System Development Fund (PSDF). Important to note here that the government had organised the e-auction on March 15, 2016, wherein bidders participated in reverse e-bidding process with per unit PSDF ceiling price of Rs 0.41/unit. However, bidders did not get an opportunity to bid below nil rupee per unit, as option been there earlier. As bidders were not provided such an opportunity, a re–auction was conducted. 

Not to be mentioned that in the country there is 24,150 MW of gas based power generation capacity and out of this, 29 plants with 14,305 MW capacity had been stranded for no supply of domestic gas. This is the third phase of auction conducted by the government under scheme of utilisation of stranded gas based generation capacity and 11 plants with a capacity of 6626 MW participated in the bidding.