One of the embarrassing and less-discussed aspects of India's power story is that there are over 90,000 megawatt (Mw) of captive generating stations above one Mw capacity. Many of them use diesel. The overall consumption of diesel in the country has almost doubled in the last 10 years from 47 billion litres in 2003-04 to 89 billion litres in 2013-14, showing a growth of seven per cent a year. A significant chunk of this growth is attributable to the use of diesel for power generation. Some of the major diesel-consuming sectors for power generation are shown in table I.
Consumption of diesel for power generation constitutes about 11 per cent of the total diesel consumption in the country, leading to a spending of Rs 64,200 crore annually. This does not even include the diesel used for power generation for small-sized generators at residences, agricultural usage and commercial establishments, the data for which are not available. The "power-backup" market in India is growing at an annual rate of 10 to 15 per cent due to the rising demand-supply gap, forcing diesel to be used as the primary fuel for this purpose.
Let us turn our attention to gas - liquefied natural gas (LNG) - as an alternative to diesel-based power. There are around 30,000 Mw of gas-based power plants sputtering along or lying completely unutilised. And 19,000 Mw of plants are clearly known to be "stranded" for lack of gas. Not only are they a national waste of ready capital assets but have also contributed in large measure to the non-performing assets (NPAs) stock at banks and financial institutions, and comprehensively stressed out promoter balance sheets.
With much of the hullabaloo about gas-pricing behind us now, it is time to see how making gas available operationally can rev up these assets to provide the much-desired spike in power availability and, more importantly, provide a cleaner and more cost-effective alternative to burgeoning diesel usage.
Source: Business Standard
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