Mumbai : State-owned natural gas processing and distribution company –GAIL (India) Limited, wants to push its gas energy in the power sector provided the policies and the duty imposed make the whole business feasible.
The gas company is looking at pushing their additional energy into the power sector, stated B C Tripathi CMD of GAIL (India) Limited during a press meet on Tuesday.
Tripathi said, “We are looking at pushing our additional energy into the power sector. If we try to push gas into the power sector, the demand will be double and triple (the demand).”
He stressed that there has to be a system for merit, considering coal based power has an impact on environment and health. “If you compare coal based power with gas based power, you will see the impact due to production of coal,” added Tripathi. “There has to be a system for merit. Merit should go beyond pricing, it should also include quality.”
According to Tripathi, GAIL can enter power sector only if the various duties that are imposed on gas energy is feasible. He also pointed out that this will allow the government to reach its low-carbon emission targets quickly. Bundling renewable energy like solar and wind with gas energy, will allow 24/7 supply of power during off-season or season when renewable energy cannot be produced.
“There is a scope and possibility for us to utilise it (gas) for power sector,” he added.
Tripathi told The Free Press Journal, “We are not looking at investing in the sector.” But, it would use the existing pipeline to explore the sector.
“There is investment already made in the power plant (by other players). Almost 35,000 MW gas based power plant are stranded. Lot of NPAs of banks is around these power plants.” Putting the ball in policy maker’s court, he said that it is on the government to make the whole idea feasible for the sector.
GAIL (India) Limited has been on a new high as it registered a 57 per cent rise in profit after tax (PAT) for the financial year 2016-17 with the PAT increasing to Rs 3,503 crore from Rs 2,226 crore in the last fiscal. In the last couple of years, the company had been able to off load its borrowing drastically due to low production of gas and low capacity utilisation of pipeline.
The company bought down the loan from Rs 11,000 crore to Rs 5,000 crore and hopes to continue repaying the loans. “Our interest rate has gone down substantially. This year we will repay almost Rs 3,000 crore. So, GAIL will be left with only Rs 2,000 crore of loans. This will help us reduce the interest burden and increase the profitability of the company in days to come.” The company has approved projects worth Rs 30,000 crore, under execution and most of it will be completed in a phased manner in next three- four years.