GS Paper - 3 (Energy)

The government has set up a committee to work out measures needed to make natural gas available to power plants at "reasonably stable prices", Oil Secretary Tarun Kapoor said. India has 24,900 megawatts of gas-based power generation capacity. But of this, 14,305 MW is stranded due to the non-availability of reasonably priced gas.

What

  1. The average domestic gas supplied to gas-based power plants is just over 25 million metric standard cubic meters per day (mmscmd), which is 70 percent short of the allocation or the requirement.
  2. While gas-based power plants act as balancers in the grid, making available gas to power plants is part of a larger plan to increase the share of environment-friendly fuel in India's primary energy basket to 15 per cent by 2030 from the current 6.7 per cent.
  3. Natural gas as a fuel is convenient to use and can be easily transported through pipelines. It is cleaner than several other fossil fuels.
  4. Of the total gas consumption of about 60 billion cubic meters, more than half or 33 bcm was imported, nation aiming to become self-reliant in energy, domestic production has to increase.
  5. India has some long-term LNG supply contracts, which are indexed to different benchmarks, thereby giving it rates that are much lower than current international prices.
  6. The focus is on exploring more areas to find gas reserves as well as raising output from existing fields, output is likely to rise next year on the back of major discoveries in the KG basin in the eastern offshore coming to production.