Govt alerts states on liquid fuel projects

Even though the cabinet has approved fuel linkages for naptha-based power projects totalling to 12,000 MW, Prof Alagh in his letter has said the Centre has included only 6,000 MW from liquid fuel during the Ninth plan period.

According to the Centre for Monitoring Indian Economy, nearly 20 million tonnes of liquid fuel would be needed for 12,000 mw of power generation capacity. Given the surplus production of naphtha by Indian refineries, this would mean imports of 12-13 million tonnes.

Second, even if naphtha imports are freed, the country doesn’t have enough port and other facilities to handle this quantity of imports. The Railways, for example, would need at least an addition 4,800 tank wagons to carry this fuel.

All this would require additional investment of around Rs 4,000 crore.Which is why Alagh has advised the states to select the location of the liquid fuel projects in a manner that these could be switched over to natural gas or liquified natural gas (lng) in the long run.

Stressing on the need for tariff rationalisation and institutional reforms, Prof Alagh asked the chief ministers to proceed further in moving towards rational electricity pricing.