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Government to Breath New Life into 8000 MW Stranded Gas Based Power Project.

The power ministry received bids from gas-based power plants with combined stranded capacity of 8,000 megawatts, seeking subsidy under the Power System Development Fund for imported natural gas. The subsidy support is for distribution companies to bring down electricity tariffs and make the cost of power affordable.

Source:  Economic Times

SNP Insights

E-auction for imported LNG supply, to stranded gas power plant will save almost INR 33,574 Cr of investment from turning in to Non Performing Asset(NPA). As power tariff is fixed for availing the subsidy benefit, Discoms won't be subjected to inflated tariff challenge despite usage of imported LNG as raw material. Government decision will revive country energy security & rejuvenate peak load addressal. This may raise the lender confidence in gas based power project, & hence new investment can come in to the sector.