Zee Media Bureau
New Delhi: The Cabinet Committee on Economic Affairs on Wednesday approved a major policy intervention, through an innovative mechanism, to revive and improve utilization of the stranded gas based power generation capacity in the country.
This capacity has been lying idle or under-utilized due to shortfall in the production of domestic natural gas in the country.
In order to revive these stranded gas based plants, the mechanism envisages importing Regasified Liquified Natural Gas (RLNG) for supply to these plants so that they can generate power.
The mechanism also envisages sacrifices to be made collectively by all stakeholders, including the Central and state governments by way of exemptions from certain applicable taxes and levies on the incremental RLNG being imported for the purpose.
Besides, gas transporters and re-gasification terminals have agreed to reduce their transportation tariff, marketing margin and re-gasification charges on the incremental RLNG. Power developers would completely forego the return on their equity.
The government also proposed to provide support to discoms from the Power System Development Fund (PSDF) through a transparent reverse e-bidding process. This will make the cost of power affordable.
With this arrangement, electricity generation in the country would be enhanced significantly by around 79 billion units, valued at about Rs 42,000 crore.
The additional generation would help light up many unconnected households in the country, besides benefiting the public at large, including farmers and poorer sections of the society who have limited access to electricity.
This initiative is another key step towards achieving the government’s commitment of 24X7 power supply to all.
This decision will also help improve grid stability and safety, as gas based plants are ideal for being used as spinning reserve, and for meeting peaking power requirements, as they can be started and shut down at very short notice.
