Power, Gas Firms In Focus On Emergency Supply Rules To Meet Summer Demand
The increase in utilisation of gas-based power plants translates into higher gas demand.
The Union government has directed gas-based power plants to operate at a maximum capacity from May 1 to June 30 in order to meet the rising power demand. Power generating companies as well as gas distribution companies are expected to be in focus on Monday as the government plans to activate underutilised gas-based power plants to tackle the anticipated high electricity demand in the summer.
How Much Gas-Based Power Is Required?
As per the arrangement, the Grid Controller of India Ltd. will be informing the gas-based generating stations the number of days that gas-based power will be required in advance.
The gas-based generating stations that currently hold power purchase agreements with distribution licensees will first offer their power to the PPA holders.
If the power offered is not utilised by any PPA holder, then it will be offered in the power market, according to the release. Gas-based generating stations not tied to any PPAs must offer their generation in the power market.
Who Gets Impacted?
Gas-Based Generating Stations
Directions issued under Section 11 will result in higher operations and electricity generation at the idle gas-based power plants. This could translate to higher revenue.
According to the Ministry of Power, companies or gas-based generating stations that currently have PPAs in place are NTPC Ltd., Tata Power Co., Torrent Power Ltd., Gujarat Industries Power Co., Gujarat State Petronet Ltd., Indraprastha Power Generation Co., Power Grid Corp., Pragati Power Corp, Gujarat Industries Power Co. and Gujarat State Petronet Ltd.
Gas Distribution Companies
The increase in utilisation of gas-based power plants translates into higher gas demand. This benefits gas companies like GAIL (India) Ltd., Petronet LNG Ltd., Gujarat State Petronet, Gujarat Gas, Mahanagar Gas Ltd. and Indraprastha Gas Ltd.
As per a government notification in March 2023, the Central Electricity Authority monitors 62 gas-based power stations. Total capacity of these stations stands at 23,845 MW.
Citi Research said India's gas-based power plants averaged a plant load factor of only 14% in the first 11 months of the last financial year. The brokerage said a higher PLF could temporarily lead to an incremental gas demand of up to 20 million standard cubic metres of gas per day in a short period.
The requirement of gas for the 62 monitored- power plants at a 90% PLF is 115 mscm per day. According to calculations by the NDTV Profit's research team, a PLF mandate in the range of 20–40% would create demand for 9–12 mscm of additional gas per day.
