25 October, 2020

Acute Shortage Of Domestic Natural Gas Has Left India Struggling

Barring a short period of surge due to Reliance’s output from the Krishna-Godavari basin, natural gas production in the country has failed to rise meaningfully, negating expe­ctations of having assured green fuel supplies at economic rates on long-term basis.

A gas-based power plant of GAIL.
Acute Shortage Of Domestic Natural Gas Has Left India Struggling

Tucked away in a recently-tab­led parliamentary panel report is a rather telling submission by Rajn­ish Kumar, chairman of the State Bank of India (SBI). “…In the current scenario, when the gas price is so high and when there are constraints in the supply of domestic gas, it seems that as if we are groping in the dark. There is no other solution. We have to write off this investment,” Kuma­­r told the parliamentary standing committee on energy which drafted the report on ‘stressed/non-performing assets in gas-based power plants’. The investment runs into thousands of crores of rupees and the potential write-off could hit hard Indi­a’s public sector banks, already groaning under a mountain of bad loans.

An acute shortage of domestic natural gas has left India struggling to meet even half of the installed 25 gigawatt power generation capacity. Gas-fired power plants make economic sense if they are operated using domestic natural gas and much of the investment spurt started around 2008, following announcements of major...



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