Gas based Power Stations Unlikely to get Subsidy Extension
Stranded and under-uitilised gas based power stations subsidy report scheme is unlikely to get an extension from the government. The scheme will end next month.
In order to bail out the 24,000 MW gas-based power stations deteriorating because of need of fuel, the power ministry is of the opinion that there should be a long term solution. Senior power ministry officials declined to comment on the same. The government has been asked by power companies to extend the scheme for 2 more years.
Association of Power Producers Director General, Ashok Khurana stated that, they have been requesting the government to continue with the scheme for the time being till a long term solution is achieved. He also added that, the scheme available at present helps stem interest accumulation, which in turn helps in keeping capital costs under control. If the scheme is not extended then, it would lead to continued accumulation of interest which nay make it strenuous to turn around the projects subsequently.
2 rounds of imported gas auction were held by the power ministry from June-September 2015 and from October 2015 to May 2016.
Continuation of the existing scheme has been recommended by the Association of Power Producers stating that it wouldn’t cost the government anything as subsidy determined in the 3rd round was negative.
In March 2015, the Union Cabinet approved the mechanism for importing gas for stranded and underutilised power plants and supply of such electricity through a support.
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