Gas Shortage Causes India to Lose 35 Billion Kilowatt-hours of Electricity

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Gas Shortage Causes India to Lose 35 Billion Kilowatt-hours of Electricity DELHI--April 16, 2012--Researched by Industrial Info Resources India (Delhi, India)--India is losing nearly 35 billion kilowatt-hours of potential power generation annually, as the country's gas-based power stations are facing an acute shortage of fuel. With a scant supply of only 57.67 million standard cubic meters per day during the last three quarters of fiscal year 2011-12, the gas-based power stations in India were running at an average plant load factor of 63.73%. About 81.44 million standard cubic meters per day of gas is needed to operate these stations at a 90% plant load factor. According to sources from the Central Electricity Authority (CEA) (New Delhi, India), gas-based power stations totaling about 790 megawatts (MW) are presently operating on liquid fuels, which have increased the cost of generation substantially. Most of the power producers have been forced to switch to expensive alternate fuels, such as naphtha and high-speed diesel, to keep their power units in operation. Historically, India has faced a chronic gas shortage. Gas supply to the gas-fired power plants has always been inadequate. The production and supply of gas has never been at pace with the growing demand of gas in the country, including that of the power sector. During the financial year 2008-09, the country's gas-fuelled power units could achieve only 50% plant load factor. The situation had started to ease a bit with the commencement of commercial production from the gas fields of Reliance Industries Limited's (BSE:500325) (Mumbai, India) Krishna Godavari (KG) Basin. With increased domestic gas-production, the power stations started receiving enough gas to operate the generation units at higher plant load factors of 63.98% and 65.56%, respectively, during the 2009-10 and 2010-11 financial years. But the recent shortfall in production from the KG-D6 block has aggrevated the situation again. Against an estimated output of 70.39 million standard cubic meters per day, the offshore block is producing barely more than 34 million standard cubic meters per day, which is less than 50% of the estimated capacity. Consequently, power generation from the gas-fired units also has seen a sharp drop. Out of a total installed generation base of approximately 190 gigawatts (GW), gas-based power generation comprises 9.7%, with an installed capacity of about 18.3 GW. To plug the prevailing demand-supply gap for natural gas in the domestic market, the government of India is importing expensive liquefied natural gas (LNG) from the gas-producing nations in the Middle East, Southeast Asia, and even as far out as Australia. Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.