Hyderabad, Nov 20 (IANS): GMR Rajahmundry Energy Ltd (GREL), a subsidiary of GMR Energy Ltd, said on Friday it has started commercial operation of its 2X384 Megawatt gas-based power plant at Rajahmundry in Andhra Pradesh.

The commercial operation of the power plant commenced with the beginning of gas supply under e-bid RLNG scheme, a scheme for utilization of stranded gas-based power plants, the company said in a press statement.

"As per the scheme, the government will subsidize the power distribution companies to the extent of Rs 1.44 per unit from the Power Sector Development Fund."

With the beginning of e-bid RLNG Scheme, the 768 MW power plant could now operate at 50 percent Plant Load Factor (PLF), thereby generating 384 MW and supplying power to distribution companies in Andhra Pradesh continuously, it said.

GREL is a combined cycle power plant with natural gas and generates power using GE's advanced class technology of gas turbines.

Current operations will continue up to March 2016, depending on gas availability and thereafter government of India will call for a fresh round of bidding.

The gas-based plant was awarded allocation of gas last month along with GMR Vemagiri Power Generation Ltd (GVPGL), which has already got operational recently. Both the plants are located adjacent to each other.

A GREL spokesperson said the gas under e-bid RLNG scheme would help in rationalizing the power tariff and improve the power supply scenario of the state.

The revenue generated through this would facilitate the GMR Energy Ltd to cover O&M expenses and service the interest cost, the statement said.

GMR Vemagiri Power Generation Ltd and GMR Rajahmundry Energy Ltd, with a combined capacity of 1156 MW, would be supplied with imported natural gas through the government's reverse auction process, it added.