The Parliemantary Standing Committee on Energy has also recommended that a scheme like E-Bid RLNG scheme is required to support gas based plants. A group of ministers headed by finance minister Arun Jaitley will final approval to the new policy.As per the initial discussions, the new subsidy scheme will be based on a gas auction mechanism where electricity generating units quoting least government support to Wholesale PPR BALL VALVE Factory offer electricity to discoms at about Rs 4.50-5 a unit using fuel being offered to them by pooling domestic gas with LNG.Under gas pooling the price of fuel could be brought that will allow electricity tariff tio fall below Rs 6 a unit. The subsidy scheme will pay generators an amount quoted by them during bidding that helps to reduce electricity tariff by another Rs 1- 1.50 per unit. The price of domestic gas at present is $ 3.36/MMBTU (Oct., 2018 to March, 2019). The gas price at power plants remains in the range of $ 4.0 - 5.5/MMBTU for domestic gas and $10-12/MMBTU for RLNG. Pooling these two will substantially bring down the fuel cost for generators.
Though the Central Electricity Authority (CEA) has classified only 14,305 out of total gas based capacity of 24,867 MW as stranded due to fuel shortage, almost entire capacity remains stressed and remaining plants are also running at sub-optimal levels and able to support just interest component on loans.The domestic natural gas production in the country during 2017-18 was about 86.93 MMSCMD against 89.57 MMSCMD in 2014-15. From 2011-12 to 2016-17, domestic gas production had been continuously declining, while in 2017-18, there was a slight increase. The import of RLNG has been continuously increasing from 50.78 MMSCMD in 2014-15 to 72.13 MMSCMD in 2017-18 and about 50 per cent of the country’s requirement of gas has now been met by the imported gas.The total domestic gas allocated to power projects is 87.12 MMSCMD but the average domestic gas supplied to gas based power plants during 2017-18 was only 25.71 MMSCMD which is 70 per cent short of the allocation. Due to this shortfall, the PLF of gas based power plants has come down to 24 per cent which used to be 67 per cent in 2009-10.
New Delhi: The Supreme Court order quashing a Reserve Bank of India circular on resolving bad debt will provide relief to power companies and lenders as well as flexibility to restructure debts but will slowdown bankruptcy proceedings, experts said on Tuesday.Supreme Court on Tuesday quashed RBIs February 12 circular, which prescribed rules for recognising one-day defaults by large corporates and initiating insolvency action as a remedy.Vishrov Mukerjee, Partner, J Sagar Associates said after the Supreme Court judgment, the RBI may have to issue revised guidelines/circulars for the restructuring of stressed assets."There is also a question mark over existing processes which may have been completed/nearing completion," he said. "However, with the threat of IBC proceedings mitigated, it will give some breathing space to power companies and lenders as well as flexibility to restructure debts in a manner which ensures continuity and value maximization for lenders as well as power companies."Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas, termed the ruling as a major development that shows how "proactive" the judiciary has been. "Whilst its too early to say but if banks voluntarily still invoke IBC - the practical impact will be minimal," he said.