Use of gas in the power sector: Is India on the threshold of a quiet revolution?
Dec 27: Globally, with the backing of Big Oil, a lot of research is now devoted to push gas as a clean fuel. 8One such document sees the growing use of gas in the power sector as the "beginning of a quiet revolution". 8This hope is fueled by the fact that there is a gradual increase in gas-based PLF between January, 2015 to October, 2016, with generation targets beaten in most months. 8There is also a marginal increase in share of gas in total electricity generation. 8A complex set of matrices will have to however be in place for a sustainable policy framework for higher use of gas in the power sector 8Find out more by clicking on our Reports section on does this framework looks. 8It was found, for example, that the ‘switching cost’ (from coal to gas) for a medium sized power plant was estimated at around $3.50 /MMBtu with domestic coal, and $5.50/MMBtu with imported coal. At higher gas prices, the difference would have to be subsidised. The sustainability of gas in power therefore depends on two factors: 1) How long will global gas prices stay low for? 2) How long can the subsidy continue to gas generators continue? 8Competitive gas prices are needed to incentivise domestic gas exploration and production. Could revenues from government take (royalty & taxes) be ploughed back into supporting gas vis-à-vis coal in power generation? Click on Reports to find out more on where this line of argument takes you