According to industry sources, the cost of electricity would be less than Rs 6 a kWh if the price of imported natural gas is pooled with that of the domestic one.
Further, gas price pooling would enable power companies to run their units at 50 per cent plant load factor, sources informed.
Sources feel that the gas price pooling mechanism for power sector, if implemented, would result in a price of less than $12 per mBtu. Though this would be higher than the domestic gas price it is lower than the prevailing imported gas price of about $18 per mBtu.
Price of natural gas can be pooled without increasing the government’s subsidy burden on fertiliser sector, sources said.
At present, the demand from the fertiliser sector is around 47 mmscmd. Of this, 32 mmscmd of gas is available domestically. The balance 15 mmscmd (32 per cent) is imported.
This ratio can be maintained in price pooling to ensure that fertiliser subsidy burden is not hampered, said an executive of a power company.
The private power producers want utilities to be asked to sign power purchase agreements with pooled-gas-based power capacity on regulated tariff. This would mean that the benefit of pooled gas is passed on to consumers.
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