Coal triumphs over expensive gas in Andhra

Vol 15, PW 22 (17 May 12) Midstream & Downstream

Strange as it sounds Andhra Pradesh will voluntarily stop taking 2.5m cm/d of Reliance D6 gas on May 18.

Why Because state-owned Transmission Corporation of Andhra Pradesh (APTransco) has begun receiving electricity from two new coal-fired sources: the 500-MW Simhadri station near Vizag, operated by NTPC; and the 300-MW Rayalseema station in south-central Kadapa city, operated by APGENCO. “Both have stabilised,” we are told, “and are supplying electricity to the grid.

” Slack summer electricity demand from farmers since the sowing season ended in April has also helped reduce the dependence on D6 gas. Yet is this a sign of things to come for India’s stricken gas-based power sector, reeling under high R-LNG prices and acute domestic gas supply shortages Coal-fired stations already account for 55% of India’s total installed electricity generation capacity of 199.87-GW (Gigawatt) compared to just 10% for gas-fired stations.

Hydroelectric power accounts for 21% and the rest is a mix of wind, biomass and nuclear. Before you get overly alarmed, remember that the D6 gas APTransco is receiving since mid-April from GAIL’s LPG facilities at Vaghodia, Vijaipur and Pata is bought at $15.9/mmbtu, equivalent to high R-LNG ‘landed’ rates, not the D6 price of $4.20/mmbtu.

Oil minister Jaipal Reddy - originally from Andhra Pradesh - is behind the gas ‘swap’ under which GAIL bought R-LNG for itself and passed on the full costs to APTransco, which in return received D6 gas from Reliance. APTransco is supplying D6 gas to GVK’s 464-MW Gautami gas-fired power station near Kakinada; GMR’s 338.5-MW Vemagiri power station near Rajahmundry; Lanco’s 738-MW Kondapalli power station; and, Konaseema Gas Power’s 460-MW ‘combined cycle’ Ravupalem power station.