New Delhi: Gas-based power generation in India is showing signs of a turnaround after years of underutilisation, with the plant load factor of gas-fired stations rising from 11.4 percent in 2022–23 to about 15 percent in 2024–25, the government told Lok Sabha on Thursday. The Ministry of Petroleum and Natural Gas said this improvement was supported by enhanced availability of natural gas and higher dispatch from gas-based plants during peak-demand months in 2025.
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In a written reply, Minister of State for Petroleum and Natural Gas Suresh Gopi said the Ministry of Power had reported that gas-based plants remain underutilised due to the high cost of generation. To meet rising electricity demand during crunch periods, the ministry implemented procurement schemes in 2023, 2024 and 2025 that enabled selected plants to supply 317 million units (MU), 482 MU and 1,477 MU respectively, backed by a minimum offtake guarantee. These interventions, he said, improved utilisation of gas-based assets, supported the grid during periods of elevated demand and helped maintain system reliability.
The Ministry of Power also invoked Section 11 of the Electricity Act to maximise generation from gas-based stations from 1 May–30 June 2024 and 26 May–30 June 2025.
Gopi said the government has taken several steps to enhance the availability of natural gas for power generation. These include expanding the National Gas Grid to connect domestic gas sources and LNG terminals to power plants, introducing a unified pipeline tariff, setting up LNG terminals, and allowing domestic gas producers with pricing and marketing freedom to sell up to 500 mmscm or 10 percent of annual production — whichever is higher — through gas exchanges authorised by the Petroleum and Natural Gas Regulatory Board.
He said LNG has been placed under the Open General Licence category, allowing buyers to freely import LNG on mutually agreed commercial terms. LNG imported for electricity generation by entities defined as generating companies under the Electricity Act is eligible for nil customs duty, enabling gas-based power plants to import LNG, generate power and sell it to customers.
The government’s broader efforts to increase the share of natural gas in the primary energy mix include expanding the city gas distribution network, allocating domestic gas to the CNG (transport) and PNG (domestic) sectors as a priority, providing pricing freedom with a ceiling for difficult fields, and promoting compressed biogas under SATAT, Parliament was told.
To raise domestic production, Gopi highlighted reforms such as the Hydrocarbon Exploration and Licensing Policy, the 2017 framework for early monetisation of coal bed methane, the Discovered Small Field policy of 2018 and a series of 2019 reforms aimed at easing approvals. Fiscal incentives such as concessional royalty rates, a seven-year royalty holiday for deepwater and ultra-deepwater blocks, and marketing and pricing freedom have been provided to support early monetisation, he said.
He added that in 2020 the government enabled market-based price discovery through e-bidding and, in 2023, permitted a 20 percent premium over administered prices for gas from new wells and well interventions of ONGC and Oil India in their nomination fields.
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The ministry said these initiatives to support gas-based power generation and improve PLF levels are expected to strengthen India’s energy security by diversifying the energy mix and reducing dependence on coal and oil.