After four years of suffering financial losses, India's first gas-based power project, Ratnagiri Gas & Power Private Ltd (RGPPL), is now set to make its mark on India's power scene. The company had suffered a Rs600-crore loss in 2008-09, due to fall in capacity generation because of machinery breakdowns. For RGPPL, the erstwhile Enron-managed Dabhol Power Company, the new lease of life has been given by the service agreement with General Electric for the running and servicing of the machines and turbines. This will allow the six turbines to run on a steady supply of gas from Reliance gas fields at the Kaveri basin. The commissioning of the Rs3,100 crore LNG terminal, which will be leased out to other companies, will also bring RGPPL extra income. "The plant will be fully operational and, with the help of GE, it will achieve full load capacity of 1,950 MW in the first quarter of 2010," says A.K. Ahuja, managing director, RGPPL. With three blocks of six gas turbines, RGPPL had a total generation capacity of 2,160 MW. But breakdowns had led to the power generation falling to 1,000 MW. The Rs655-crore, 16-year-long, comprehensive service and guarantee agreement with GE includes repair to machines, a Rs360-crore rehabilitation package and the supply of spare parts worth Rs288 crore. Combined with the fact that Reliance will be supplying 5.6 million standard cubic metres per day (mmscmd) from October (to be increased to 8.5 mmscmd from January 2010), RGPPL is just raring to go. Reliance is selling gas to the Enron plant at $5.2 per unit. "The service agreement shows commitment for the complete revival of the plant," says Kishore Jayaraman, CEO, GE Energy, India, Sri Lanka and Bangladesh. "By putting in preventive tools, GE will ensure long-term reliability for these machines." More efficient So, it's not surprising that, today RGPPL looks different from what it was five years ago. More efficient than other fossil fuels, natural gas generates more power and does more work per unit of fuel used. The combined cycle gas technology results in better utilisation of gas, with higher electricity output, lower costs and less pollution. And the thermal efficiency of the combined cycle gas turbine power generation process is 50 per cent higher than conventional steam technologies using oil or coal. The demand for natural gas in India has been on the rise, especially on the west coast. Currently, India's daily consumption of natural gas is 180 mmscmd, which cannot be met with its domestic production of just 80 million standard cubic metres of gas. Fertiliser plants account for 40 per cent, and petrochemical plants, 20 per cent of India's daily gas consumption. With India needing 300 million cubic metres of gas per day by 2012, the government is in a hurry to meet this demand, and 4,577 MW of gas-based thermal power capacities have been slotted for construction during the 11th Plan. Currently, India has just two LNG terminals, Petronet's at Dahej and Shell's at Hazira - both in Gujarat and having capacities of 8 million btu (British thermal unit) each. While more LNG terminals are planned at Kochi and Pipavav, RGPPL'S LNG terminal, meanwhile, can help augment India's supply of LNG. The three LNG terminals together will be able to meet 70 per cent of India's consumption needs. Karnataka, Goa and Kerala too are signing power purchase agreements for the supply of natural gas to meet their power shortages. Karnataka faces a daily shortage of 500 MW and the supply of 16 mmscmd of gas from RGPPL will fuel the industrial hubs around Belgaum, Dharwad, Haveri, Davan-gere, Chitradurga, Tumkur and Bangalore districts of the state. With both Goa (40 MW daily) and Kerala (a peak hour shortage of 500 MW) also facing power shortages and seeking clean energy, RGPPL is the preferred option. Even for the LNG terminal, NTPC, Essar Oil, GMR group, Reliance Industries and Indian Oil Corporation have evinced interest in leasing out the facilities, where RGPPL would charge a toll fee. From this, the company is expected to earn an annual fee of Rsl50 crore. "Natural gas is referred to as the fuel of the future," says Sachchidanand Shukla, economist, Enam Securities. "And it will remain the sought after fuel in India. In the thirsty power sector, electricity generation, based on imported naphtha and condensates, will not be able to compete with natural gas. Also, the main obstacle today is lack of terminals, which is where RGPPL scores." Given India's growing need, it seems that this is RGPPL'S moment.