Industry stress
Gas-based power
Domestic gas allocation steady; renewables reducing merit-order share
editorial · as of 1 Apr 2026
Operator read
Gas power: adequate allocation; renewables displacing marginal dispatch.
Gas-based power plants run at variable load factor; economics depend on gas-vs-coal merit order and domestic gas allocation. Many plants idle at current prices.
Feedstock costs
Stress drivers
- Domestic gas supply allocation below 75%
- LNG spot price above $14/MMBtu
- Gas plant load factor below 30%
- Coal shortage redirecting dispatch
- Renewable surplus displacing gas on the grid
Why it matters
Gas-based power plants have ~25 GW of installed capacity but operate at low load factor (sub-30%) because domestic gas allocation is limited and LNG economics rarely beat coal on merit order. When renewable generation dips and coal shortfalls occur, gas plants get called on as swing capacity. The marginal cost of gas-based power at $14/MMBtu LNG is ₹8-10/kWh, above most distribution tariffs.
Source