According to reports, power-famished industries in Andhra Pradesh are increasingly approaching gas-based power units to supply part of their idle capacity that can be used for generation with regasified liquefied natural gas (RLNG). On their part, power units are grouping industrial consumers who are willing to buy RLNG power and talking with government distribution companies to facilitate billing arrangement and supply of RLNG power directly to the consumers.
It is estimated that existing gas-based power units have a combined idle capacity of about 2,038 MW that can immediately start generating power with RLNG.
The GMR Group, for instance, which has two units having an idle capacity of about 460 MW, has received expression of interest from at least 125 industrial houses in the State. It can supply 300 MW at short notice using RLNG sourced from GAIL.
It is looking at options to source LNG through medium to short term global contracts.
Industry bodies see RLNG power as an effect short-term measure to increase supplies to industries, though it would be a costlier option. The current power demand in the State is about 260 MUs per day, while supplies are struggling to reach 215 MUs, with the deficit being in the range of 45 MUs per day (or 1875 MW/day).
It is projected that the deficit would touch 70 MUs a day by April if steps to mitigate the problem are not taken. While the variable cost of using RLNG is estimated at Rs 7.60 per unit, the costs of using naphtha and diesel could be as high as Rs 11.75 and Rs 12.30 a unit. The fixed tariff for the three options will be constant at about Rs 1.04 a unit.
Thus, RLNG power could be priced at about Rs 8.60 a unit.