- Polluted New Delhi runs $780 million gas plant below potential
- Surfeit of cheap coal crowding out cleaner gas power in India
About 25 kilometers (16 miles) northwest of Prime Minister Narendra Modi’s office in New Delhi, a $780 million gas-fired electricity plant that could reduce the choking pollution in India’s capital is operating at a fraction of its potential.
The 1,500 megawatt facility in Bawana ran at about a sixth of capacity on Monday, while a much older, belching coal plant some 15 kilometers southeast of central New Delhi provided the biggest share of the city’s power generation.
The dichotomy shows India is struggling to follow the U.S. and Europe in giving natural gas a greater role for electricity production in place of coal power, which emits more of the tiny particles that damage air quality. The nation is awash with cheap supplies of the dirtier fuel after boosting output, hurting the competitiveness of gas despite a 33 percent slump in the commodity’s cost in the past year.
“There’s a lot of power available at lower prices,” said Sanjay Kumar Banga, head of power management at Tata Power Delhi Distribution Ltd., which purchases and sells electricity in New Delhi. Bawana is "hard to accommodate" among the lowest cost options, he said.
Gas accounts for 8 percent of India’s power generation capacity, versus 62 percent for coal. Yet gas plants used less than a quarter of their capacity of roughly 24,500 megawatts in the year ended March. That’s a sign of fizzling efforts to spur extraction of domestic gas reserves, as well as bottlenecks that inhibit imports.
Modi’s administration in March gave explorers pricing freedom for deep-sea fields. It remains to be seen whether this step will lead domestic companies such as Reliance Industries Ltd. to extract more of the fuel, or attract foreign players including Exxon Mobil Corp. and Chevron Corp.
In New Delhi, local officials have said they want to embrace gas. The challenge is getting cheap enough supplies to ensure distributors purchase the power.
India’s biggest gas transporter GAIL India Ltd. said it’s in talks with Pragati Power Corp., which operates Bawana, about supplying fuel to the facility. The plant could meet about a third of the mega-city’s power needs.
Federal Oil Minister Dharmendra Pradhan said in April that GAIL can supply gas to Bawana at about $8 per million British thermal units. That would translate into a power tariff of roughly 5 rupees per kilowatt hour -- more than the average market clearing price on Tuesday of 2 rupees.
The annual pollution from the coal-fired plant in the capital is as great as 18 years of emissions from all the city’s vehicles, according to Pradhan.
New Delhi was the world’s most polluted city measured by airborne PM2.5, with an annual average of 153 micrograms per cubic meter, according to a 2014 World Health Organization database. The top four most polluted cities were in India. PM2.5 particles can penetrate deep into the lungs and enter the bloodstream.
Modi has targeted a record expansion of renewable electricity to curb emissions even as he prodded state-run Coal India Ltd. to mine more of the fuel to reduce blackouts. India is also in talks with liquefied natural gas supplying nations for long-term contracts.
The shift to clean power such as solar energy is a longer-term move. In the meantime, gas plants that could stabilize the electricity grid and reduce pollutants are idling.
One way to increase the role of gas is to force electricity distribution utilities to avert blackouts, and direct them to gas-fired power to achieve that goal, said Nitin Zamre, managing director of Indian operations at Fairfax, Virginia-based energy consultancy ICF International Inc.
"It’s difficult for gas to compete with coal in power generation without any
external push," Zamre said.