Gas pooling may help revive Rs 60,000 crore investments

In a bid to provide 24x7 power to all, the government is contemplating policy intervention to revive about 14,000 mega watt (mw) of gas-based power plants.

According to sources, the government is considering pooling of domestic gas with the imported re-gasified liquefied natural gas (RLNG) in order to make the stranded power plants generate power.

This policy intervention aims at adding an additional 75 billion units of power, which would translate into Rs 40,000 crore, and at the same time revive stressed assets worth over Rs 60,000 crore, which are on the verge of turning into non-performing assets.

Sources said that the government is also evaluating, “intervention in the nature of sacrifices being made collectively by all stakeholders, including the central and state governments, the gas transporters, and even the plant developers who would completely forgo their return on equity.”

In order to keep power tariff at affordable rates, sources said: “The government is considering giving support to discoms through the Power System Development Fund (PSDF), which is aimed at grid stability and security.” It is understood that such a support is best suited for the gas-based power plants.

“With the revival of the stranded gas-based generating capacity, the total electricity generation in the country can be enhanced significantly, and have a multiplier effect for both banking sector as well as power sector,” the source said.

Gas-based power plants are considered ideal over conventional sources due to its better economics and lesser impact on the environment.