New Delhi: In a major step which will provide gas supply to 14,305 MW stranded power plants, the Union Cabinet on Wednesday approved a new scheme where imported gas will be provided at subsidy to power plant through reverse e-bidding.

A number of gas based power plant have been lying idle due to lack of gas after fall in supply of natural gas from Reliance Industries KG D6 block. Many of the stranded gas based power projects are located in the Southern region which has power deficit. With this, the government is hopeful that electricity generation in the country would be enhanced significantly by around 79 billion units, valued at about Rs 42,000 crore.



According to the Cabinet decision, regasified liquefied natural gas (RLNG) will be imported for supply to these plants so that they can generate power. The mechanism also envisages sacrifices to be made collectively by all stakeholders, including the Central and state governments by way of exemptions from certain applicable taxes and levies on the incremental RLNG being imported for the purpose.

Besides, gas transporters and re-gasification terminals have agreed to reduce their transportation tariff, marketing margin and re-gasification charges on the incremental RLNG. Power developers would completely forego the return on their equity. Centre proposes to provide support to discoms from the Power System Development Fund through a transparent reverse e-bidding process.

Out of 24,150 MW gas grid connected power generation capacity in the country, 14,305 MW of capacity has currently no supply of domestic gas and may be considered as stranded.