Gas Based Plants Becoming Impractical, NTPC Chief Says

25 Mar 2026 CW Team

NTPC chairman Gurdeep Singh has said that gas based power plants are increasingly becoming impractical as a generation option in the present market and policy environment. He warned that persistent supply constraints and elevated gas prices have eroded the commercial viability of such plants, prompting the central public sector firm to reassess investment plans. The observation reflects broader industry concern over the economics of firming capacity using gas.

Singh attributed the shift to a combination of tight domestic gas availability, the cost of imported liquefied natural gas and the low utilisation of existing gas units, which together raise generation costs. He said that prolonged periods of low plant load factors make it difficult to recover fixed costs and justify long term operation of gas based stations. The chairman noted that tariff outcomes and investor confidence are affected when fuel supply and price signals remain uncertain.

The assessment is likely to influence future capacity allocation and project pipelines, with the company placing greater emphasis on renewables and flexible thermal options. Singh indicated that conversion of some assets to multi fuel operation and exploration of firming solutions could be considered to preserve system reliability. He also highlighted the need for clear policy on fuel allocation, contracting arrangements and market mechanisms to ensure energy security while managing costs.

NTPC is exploring alternative pathways such as green hydrogen and enhanced grid flexibility to reduce dependence on gas for peaking and mid merit generation. The chairman urged coordinated action between regulators, fuel suppliers and generators to craft pragmatic solutions that balance affordability, reliability and decarbonisation goals. Industry observers said that policy clarity will be crucial to guide investment decisions.

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