Govt's e-auction of gas supply helps revive 9 stranded power plants of 5.942 MW capacity

The government claims to have helped revive nine stranded gas-based power generation plants with an installed capacity of 5,942 MW, which have successfully bid through a transparent and competitive reverse e-auction process.

These plants would generate 6.79 billion units of electricity which will be supplied at or below Rs4.70 per unit to the purchaser discoms during the period from 1 April 2016 to 30 September 2016.

The auction process successfully concluded on 20 March wherein nine plants emerged as preferred bidders and were allocated 7.62 MMSCMD e-bid RLNG.

Previously an e-auction was held on 15 March 2016, wherein bidders participated in reverse e-bidding process with per unit PSDF ceiling price of Rs0.41/unit. However, the bidders did not get an opportunity to bid below Rs0.00 per unit, as option for the same was not built in. In light of the fact that the bidders were not provided such an opportunity and the sufficient competition might not have been generated, a re–auction was conducted.

The re-auction resulted in aggressive negative bidding with the lowest bid at Rs0.03 per unit. As a result the government estimates savings of Rs18.29 crore to its Power System Development Fund.

The present reverse e-auction for the stranded gas-based plants is the third phase of auctions conducted under the Scheme for Utilisation of Stranded Gas-Based Generation Capacity.

The grid connected gas based power generation capacity in the country is 24,150 MW. Of this, a capacity of 14,305 MW had no supply of domestic gas. These comprise 29 plants which were eligible to participate in the auction process held on Sunday. Eleven plants with a cumulative installed capacity of 6,626 MW participated in the bidding for Phase III.

The successful bidders are mostly power plants in the southern region. The generation from these plants would improve the power availability in the southern grid, mitigating to a large extent the shortage of availability and constraint of evacuating the power to the southern region from other regions.

The revival of stranded power plants is part of the government's plan to ensure 24X7 power to all.