India prefers gas to coal:Platts report
In the latest International gas report released by Platts says India plans to bring another 100 GW of power generation capacity in five years from next April. This staggering feat will rely on gas for perhaps a quarter of the total: coal has problems while for gas the situation is becoming simpler.
German engineering firm Siemens has been awarded contracts for the turnkey construction of two gas-based combined cycle power plants totalling 1.6 GW for Torrent Group. GVK Power and Infrastructure has contracted a consortium of Hyundai Engineering & Construction company and Larsen Toubro to build an 800-MW gasfueled plant in Andhra Pradesh state. These are the initial contracts being seen for new gasbased power generation capacity as the government is working out a policy for allocating gas to new gas-fuelled power projects and expanding the capacity of existing power plants. Gas allocation from new sources such as the KG-D6 field has been hitherto restricted to operating power plants which have run short. It also has emerged that it will stay at 60 million cubic meters/day output.
The electricity authorities have plans for a total 100 GW of new power generation capacity coming on line over the next five-year development period that starts in April 2012, most of it to be fueled by coal. But the availability of more coal is becoming a major issue as environmental and land related issues stand in the way of the development new mines. Further, large-scale coal imports are constrained by port and other infrastructurerelated issues. New thinking among the planners is that if gas did become vailable, about one-fourth of the new capacity could run on that, to make up for the shortfall in coal-fired capacity. The authorities responsible for generation have been encouraged by the prospects for gas production in the Krishna-Godavari basin. This could mean that more gas can be made available by the government for new generation capacity. Second, the Supreme Court’s
ruling has removed any uncertainty about the powers of the government to control the pricing of gas (IGR 648/1 and see page 13). Third, there are new LNG import capacities being built or at the planning stage.
The Empowered Group of Ministers will decide on the allocation of gas for new consumers in the power sector. Those showing eadiness for the new capacity will get priority over others, according to power ministry officials. Torrent already operates nearly 1.148 GW of CCGT capacity in Gujarat state and it will have 1.6 GW more capacity there. Siemens will carry out the turnkey construction of 1.2 GW divided between three CCGTs. One is at the Dahej Special Economic Zone under Torrent Energy. Another 400-MW combined cycle plant will be built in the vicinity of the Surat city. These deals include long-term service agreements. Mumbai-based L&T said it has the order for total construction includingcertain electrical and mechanical balance of plant items for two units of 392 MW each for the Gautami Stage-11 combined cycle power plant. The company is in consortium with Hyundai for this work.
Lanco Infratech, another major power developer operating the 368-MW gas-fueled Kondapalli I station in Andhra Pradesh, has the 133-MW Kondapalli II nearing commissioning stage and Kondalli-III and IV which will add 742 MW are being built. GMR Energy has also tendered for 700 MW new capacity at the already-operating 388-MW Vemagiri project in the southern Indian state. The rich gas flows from the KG-D6 field of Reliance Industries is giving hope to Andhra Pradesh for new gasfueled power generation as the state administration is itself seeking allocation of over 9 million cu m/d gas for a 2.1-GW CCGT in Karimnagar district. PPN Power Generating Company and Karnataka Power Corporation are the latest to call tenders for 1.08 GW and 1.4 GW CCGTs in Nagpattinam district of Tamil Nadu and Bidadi in Karnataka respectively
But Reliance Power might emerge as the biggest of the developers of new gas-based power generation capacity after the Supreme Court verdict in early May resolved the dispute between Reliance Natural Resources, an associate company of the RPL, and Reliance Industries, operator of the KG-D6 with 90% stake there. Since then the two have worked out an agreement for gas supply. It has also been decided to merge RNRL with RPL to facilitate the gas supply to RPL’s power plants. The new developments have led RPL to go for bigger, gas-based generation capacity than stated earlier. The RPL had called tenders in August last year for construction contracts for about 8 GW at two locations including Dadri in Uttar Pradesh and Shahapur in
Maharashtra. But the protracted gas supply dispute and another legal case surrounding the land acquisition at Dadri held up the progress of the tender. The merger announcement on July 4 envisaged the acceleration of Reliance Power’s plans for setting up as much as 10 GW of gas-based power plants. Leading Indian power producer NTPC, also expecting some outcome of the legal dispute with RIL over gas supply from the KG-D6, is also preparing to issue a tender call for construction contracts for 1.3 GW expansion at both the Gandhar and the Kawas gas-run power plants in Gujarat. – Sunil Saraf
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