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NTPC said to triple gas use amid power supply shortages

LiveMint logoLiveMint 16-09-2017 Rajesh Kumar Singh

New Delhi: NTPC Ltd., India’s biggest electricity producer, has boosted natural gas-fired generation as a drop in hydropower, nuclear and wind energy increases demand for thermal power, according to company officials with knowledge of the situation.

Plant utilization at NTPC’s gas-fired stations has almost tripled to 60% in the past three to four days, said the officials, who asked not to be identified, citing company policy. That compares with an average plant utilization of about 24% for NTPC’s gas-fired stations in the three months ended June, when summer demand peaks.

To meet the sudden increase in demand, NTPC is buying about 10 million cubic meters re-gasified liquefied natural gas daily from the state-run gas distributor, GAIL India Ltd., on a spot basis, the people said. GAIL imports the fuel as liquefied natural gas.

A recent drop in output from hydro, wind and nuclear power plants has opened up an opportunity for gas-fired plants, which on average run at about a fifth of their capacity because they are rarely able to compete with cheaper fuels. GAIL chairman B.C. Tripathi said earlier this week that the company is witnessing a surge in demand for gas from power producers including NTPC and Indraprastha Power Generation Co., which supplies power in the nation’s capital New Delhi.

NTPC chairman Gurdeep Singh didn’t respond to a call seeking comment on his mobile phone. His office said he won’t be available to comment on Friday.

Temporary demand

“One reason for the spurt in gas power demand is that all of a sudden in Gujarat, wind power has come down in the last week,” according to Rajender Singh, technical director at the nation’s biggest importer of the super-chilled fuel, Petronet LNG Ltd. “The wind season is over slightly earlier, normally it lasts till the end of September. That’s why power plants, especially in Gujarat, have started consuming more gas.”

A rainfall deficit in some parts of the country has cut hydropower generation, while a 1-gigawatt nuclear reactor at the Kudankulam plant has been under a maintenance shutdown for over a month, reducing nuclear power output. Coal-fired power generation surged 17% in August to compensate for the shortfall in electricity from other sources.

Still, some gas-plant operators say the rise in demand may be temporary and are holding back from restarting their turbines. Lanco Infratech Ltd., which operates gas-fired power plants in southern state of Andhra Pradesh, is still not finding buyers for its gas-fired electricity, according to its finance head, T. Adi Babu.

“While some more gas plants may have raised output, many more would be waiting to see if the demand sustains for a longer time,” said Debasish Mishra, a partner at Deloitte Touche Tohmatsu LLP in Mumbai. “Most of the plants are combined cycle, and they need a certain utilization level to run viably.” Bloomberg

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