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Project Insights

India’s gas power plants need price reform to survive

The plants face bankruptcy unless the government can provide a price structure that offers a premium for flexible generation The plants face bankruptcy unless the government can provide a price structure that offers a premium for flexible generation.
By Andrew Walker 8 January 2019 Asia Pacific / Pipelines, Storage & Power 0 33812
A 500 MW combined-cycle power plant in Gujarat (Essar)

Calls by the head of India’s state bank last week for the country to write off its gas-fired power plants highlight how precarious the situation is for gas-to-power in India and the uphill struggle gas faces in becoming competitive against coal and renewables.

Most of India’s gas-fired power fleet is stranded without fuel. The plants were built in anticipation of low-cost gas from the KG-D6 field, but disappointing production over the past decade has left them on the verge of bankruptcy.

Speaking to the Indian parliament’s Standing...