Demand from gas-based power plants drive up gas trading at IGX by 480% y-o-y in May

The must-run status mandated by the Centre for gas-based power plants pushed up gas trade volumes at IGX by 480 percent year-on-year in May
Natural gas
Natural gasPSU Watch
  • India has gas-based power generation capacity of 24.8 GW

  • Their PLF has averaged around 11 percent in recent years

  • However, India’s gas-based power plants recorded a PLF of 27.38 percent in May as demand for electricity went up

  • Gas-based power plants generated 67% more electricity in May than the target

New Delhi: The must-run status mandated by the Central government for gas-based power plants and a following increase in demand for gas by power stations have pushed up gas trade volumes at Indian Gas Exchange (IGX) by 480 percent year-on-year in May. The IGX traded 4.92 million MMBtu (~124 MMSCM) gas volume in May 2024, which was higher by 99 percent on month-on-month basis and 480 percent on year-on-year basis, said IGX on Thursday. “Trade volumes were high mainly due to an increase in gas demand from gas-based power plants amid hot weather and directives from the government to maximise their output to address the growing demand for electricity,” said IGX.

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India has gas-based power generation capacity of 24.8 GW. However, the utilisation of these gas-based power plants has been low with Plant Load Factor (PLF) averaging around 11 percent in recent years. However, in April this year, the government directed all gas-based power projects to run their plants from May 1 to June 30 in view of the rise in electricity demand due to early onset of heatwave in summer this year.

Resultantly, India’s gas-based power plants have recorded a PLF of 27.38 percent in May. Against a targeted power generation of 3,030 Million Units (MU) in May, gas-based power plants have generated 5,053.41 (MU), almost 67 percent more than the target. In the April-May period this year, gas-based power plants were given a target of 6,138 MU power generation, they produced 8,773.75 MU, which is nearly 43 percent more.

GIXI for May was $10.2 per MMBtu

GIXI (Gas Index of India) for May 2024 was Rs 851/$10.2 per MMBtu, higher by 13 percent last month. GIXI-South was Rs 786/$9.4 per MMBtu and GIXI-West Rs 901/$10.8 per MMBtu. Different spot gas benchmark prices recorded were — HH at ~$2.1/MMBtu, TTF at ~$10 /MMBtu, whereas LNG benchmark indices were — WIM ~11.3 $/MMBtu.

The total domestic ceiling price category gas traded during the month was 0.20 million MMBtu at ceiling price (Rs 823/MMBtu) at KG Basin delivery.

Natural gas
Battery storage could soon replace gas-based power for meeting peak demand: IEEFA

Maximum gas trades took place in monthly contracts: IGX

A total of 96 trades were executed in May. During the month, 32 trades (maximum number) were executed in Monthly contracts, followed by 29 trades in Daily contracts and 19 trades in Weekly contracts, other contracts were Fortnightly, Weekday and Day-Ahead, said IGX. The most active delivery point for free market gas was Dahej & KG Basin for Ceiling Price gas, other trading delivery points were — Hazira, Ankot, Suvali and Mhaskal. During the month, the exchange-traded gas deliveries were 3.47 million MMBtu (~3 MMSCMD).

IGX currently offers delivery-based trade in six different contracts such as Day-Ahead, Daily, Weekday, Weekly, Fortnightly and Monthly, under which the trade can be executed for six consecutive months.

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