Hyderabad: The Ministry of Environment and Forests (MoEF) has allowed GVK Group's gas-based power plant in East Godavari to use diesel as an alternate fuel after the company said gas supplies from Reliance D-6 block was dwindling.
The Expert Appraisal Committee under the Ministry had earlier rejected the Group's proposal to use diesel as an alternate fuel at the plant, and advised it to approach the Ministry of Petroleum for its views on the matter.
The panel, whose nod is required for any change in fuel use at power plants, changed its decision in the light of the Oil Ministry's move last month to abolish subsidy for bulk diesel purchasers.
GVK is operating a 390 MW (Expansion Phase-II) gas- based power project at Jequrupadu near Krishna-Godavari basin in East Godavari district.
"In view of the information provided...The Committee finally recommended that HSD (High Speed Diesel) may be permitted as top up fuel only till 100 percent natural gas supply is available," the EAC said recently after going through documents provided by GVK.
GVK told the panel that gas supply from Reliance Industries had been declining and the current supply was about 0.5 MMSCMD instead of 1.1 MMSCMD required. As a consequence, the plant is operating at just 47 percent Plant Load Factor.
Due to continuous reduction in gas supply, energy dissemination to the grid has gone down. Hence, to meet the power demand of the grid, it is envisaged to use liquid fuel (HSD) instead of naphtha, GVK informed the EAC.
The company had said use of HSD will be an interim arrangement till full natural gas supply is made available.
The EAC had last year rejected the proposal on the grounds that the HSD is a subsidised product and hence cannot be used for commercial purpose.
However, the decontrol of diesel for bulk buyers paved the way for the gas-starved company to go for HSD as an alternate fuel to run the project. GVK has also obtained the Oil Ministry's NoC to use diesel.
EAC observed that the Government order prescribes that power producers using HSD could source their requirement of diesel from oil firms at mutually agreed terms and conditions.
It asked GVK to institute a study on radiation due to release of mono-nitrogen oxides (NOx) from the plant. PTI