Government Boosts Natural Gas Infrastructure for Power Generation
The Indian government is ramping up efforts to enhance the supply of natural gas for electricity generation. Key measures include expanding the National Gas Grid to link domestic gas resources with Liquefied Natural Gas (LNG) terminals and power plants. This initiative also involves implementing a unified tariff system, establishing LNG terminals, and allowing domestic gas producers greater marketing freedom.
In an important policy shift, LNG has been placed under the Open General Licence (OGL) category, enabling buyers to import LNG as needed, based on mutually agreed commercial terms. Additionally, if LNG is utilized for electricity generation, it will be exempt from customs duties, thereby facilitating easier access for gas-based power plants.
To further increase the role of natural gas in the country’s energy mix, the government is working on various initiatives. These include expanding the National Gas Grid Pipeline, enhancing City Gas Distribution networks, establishing more LNG terminals, and prioritizing gas allocation for transportation and domestic usage. The government’s Sustainable Alternative Towards Affordable Transportation (SATAT) initiative is also aimed at promoting Compressed Biogas (CBG).
In an effort to boost domestic gas production, India has adopted the Hydrocarbon Exploration and Licensing Policy (HELP), transitioning from a Production Sharing model to a Revenue Sharing mechanism. Moreover, various policies have been introduced over recent years to facilitate quicker monetization of Coal Bed Methane (CBM) and small fields, reduce royalty rates for deep-sea blocks, and provide fiscal incentives for early gas field development.
The Ministry of Power has noted a significant underutilization of existing Gas-Based Plants (GBPs) due to high electricity generation costs. To address peak demand, the Ministry has implemented power procurement schemes for GBPs through competitive bidding, guaranteeing minimum off-take during crucial periods. This initiative has led to a notable increase in the utilization of gas-based assets, thereby supporting the national grid’s reliability.
Furthermore, the Ministry is directing gas-based stations to maximize generation during the critical months ahead. These policy initiatives are expected to enhance energy security, diversify the energy mix, and reduce dependency on coal and oil.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
