Govt brings relief to 2,500 Mw thermal power stations with pilot scheme

Electricity generating firms would now be able to sell power without binding pacts, as the Union government on Monday allowed procurement of power for three years under medium term from generators with commissioned projects but without Power Purchase Agreement (PPA).

The Central Government today launched a pilot scheme for procurement of aggregate power of 2,500 Mw on competitive basis for three years under medium term i.e. from generators with commissioned projects but without PPA.

Ministry of Power issued the guidelines for the said scheme on April 10. PFC Consulting Limited (a wholly-owned subsidiary of PFC Ltd) has been appointed as nodal agency and PTC India Limited as the Aggregator.

PTC India would sign three-year (mid-term) Agreement for Procurement of Power with successful bidders and Power Supply Agreement with the Discoms, an official statement said.

Under the scheme a single entity can be allotted maximum capacity of 600 Mw. The scheme assures a minimum off-take of 55 per cent of contracted capacity. The tariff will be fixed for three years without any escalation.

PFC Consulting would start inviting bids from this week and bidding will be conducted on the DEEP (Discovery of Efficient Electricity Price) e-Bidding Portal. It is expected this scheme help to revive the power demand which has affected the generators not having PPAs.

Many power projects were stranded in the past due to low availability of coal supply, lack of long-term PPAs, regulatory hurdles, and delays in receivables from distribution companies (discoms). Of 80,000 Mw stressed assets, more than 20,000 Mw, with an investment of about Rs 1,000 billion, are operating with long-term PPAs and necessary fuel supply agreements.

More than 15,600 Mw of operational coal-based power plants have been classified as stressed assets due to the lack of PPAs. Research firm Icra recently noted that only 7,600 Mw of bids for long-term power procurement have been invited by discoms in Andhra Pradesh, Kerala, Telangana and Uttar Pradesh over the past four years. Of this, PPAs have been signed only for 1400 MW by Kerala and Telangana.