In a significant development, state-run GAIL said on Thursday that it has signed a MoU with Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL) to explore the possibility of transferring RRVUNL’s two gas-based power plants to a proposed joint venture company (JVC).
The development assumes significance as gas-based power generation—under a government mandate—was critical in providing uninterrupted power during the high-consumption summer season, which witnessed a peak demand of 250 gigawatts (GW) in May 2024.
“With an intent of optimising operations of gas-based power plants in Rajasthan, RRVUNL and GAIL shall explore the possibility of transferring RRVUNL’s gas-based power plant located in Dholpur and Ramgarh to a proposed JVC between GAIL and RRVUNL,” GAIL said in a statement.
Further, both parties will work together to set up around 1,000 megawatts (MW) of solar and wind projects in suitable land parcels, thus creating an opportunity for round-the-clock (RTC) power.
This is the second time that India’s largest gas utility will own a stake in running a gas-based power plant. In May 2022, the Maharatna company acquired a 26 per cent equity stake in ONGC Tripura Power Company (OTPC), which owns and operates a 726.6 MW gas-based combined cycle power plant in Palatana, Tripura.
Gas-based power plants
GAIL said detailed due diligence and feasibility studies for each project will be carried out to establish the techno-commercial viability of the projects before forming JVC.
GAIL, through its natural gas pipeline network of around 1,090 km, supplies gas to industrial customers in the catchment area of Bhiwadi, Neemrana, Khuskhera, Kota, Jaisalmer and Chittorgarh region in Rajasthan, including Chambal Fertilizers and Shriram Fertilizers.
The company also supplies gas to 19 Authorized City Gas Distribution entities in Kota, Bhilwara, Bhiwadi, Chittorgarh, Jodhpur, and various other districts of Rajasthan for residential, commercial, small industrial, and transport sectors to promote green and clean energy.
GAIL owns and operates 1,427 kms long Jamnagar-Loni LPG pipeline. Most LPG pipeline (694 kms) is operational in Rajasthan from Abu Road to Alwar. GAIL is also contributing to the Jal Jeevan Mission (JJM) scheme in Rajasthan by providing polymers for manufacturing HDPE pipes and ensuring a tap water supply to every rural household.
During Q1 FY25, gas-based plants clocked a capacity utilisation, or plant load factor (PLF), of 25.8 per cent, generating 13,338.23 million units (MU) on a provisional basis, the second highest after Q1 FY21.
The higher production by gas-based power plants also pushed up the contribution of gas to India’s power generation mix. The share increased from 2 per cent in June 2023 to 2.8 per cent in June 2024 due to the implementation of Section 11 of the Electricity Act, 2003, Crisil Market Intelligence & Analytics said.