India is willing to consider long-term fixed price contracts for the supply of gas which will enable power producer to enter into a power supply contract at an affordable price, the minister for coal, power and new and renewable energy said.
Piyush Goyal said in Brisbane that additionally, opportunities to control the entire value chain right from gas production, liquefaction, shipping, re-gasification and power generation can be evaluated at the current historic low prices of many of these activities. The minister is leading a delegation for the 3rd India-Australia Energy Security dialogue in Australia.
According to a government statement, Goyal highlighted that India is running one of the world’s largest renewable energy programme which aims to increase the capacity five times to 175 GW over the next seven years. This will require gas based plants which can act as spinning reserve and supply power during deficit times of day (like evenings) when renewable energy production reduces while stabilizing the grid. He also stressed that since coal based power is available in India at less than 5 cents per unit, the LNG providers should consider supplying gas to India at a price that is comparable.
Pointing out that India is the fourth-largest energy consumer in the world A.K. Jana, executive director of GAIL stated that India has also developed sufficient infrastructure in pipeline transportation, regasification facilities as well as end consumers facilities such as gas based power plants. These facilities enable the consumption of around 300 MMSCMD, whereas the present consumption is less than 50 percent of the same. This provides good opportunities to countries which have a surplus of natural gas provided it is available at affordable prices, he said.