Govt mulls round 2 of 2,500 Mw medium-term power purchase agreement auction

Buoyed by a good response for the first tender of mid-term (3 years) power purchase agreement auction, the power ministry will bring its second round for 2,500 Mw capacities to give relief to stressed power assets, Power Secretary A K Bhalla said Tuesday.

A PPA is a prerequisite for getting coal supplies for power plants.

Power sector is facing stress due to coal shortage and other issues. Many power projects are starving for coal in the absence of PPAs. The government's scheme to auction 2,500 MW medium-term PPAs evoked good response and PPAs for 1,900 Mw capacities were signed under the scheme last month.

"We found that a lot of interest is coming up for (the scheme to auction) 2,500 Mw medium-term PPAs. So definitely there would be PPAs coming up (on the block). This was a pilot. We will try to bring a formal scheme for another round of 2,500 Mw medium-term PPAs.

"We did not have difference between fixed cost and variable cost. There was no escalation (of tariff). Those points will be discussed. Whatever (issues) stakeholders have raised, will be discussed," he said.

The power ministry in April 2018 had issued guidelines for a pilot scheme to facilitate aggregation of procurement of power (2,500 MW for 3 years) from commissioned coal-based power plants through competitive bidding.

The PFC Consulting conducted the bid process for selection of capacity on DEEP e-bidding Portal from different projects. Subsequent to the bidding process, tariff was discovered as Rs 4.24 per unit and projects with aggregate capacity of 1,900 MW were declared successful bidders.

The agreements under the scheme were signed with the successful bidders and procuring DISCOMs on October 29, 2018.

The seven successful bidders were - RKM Powergen (550 MW), Jhabua Power (100 MW), MB Power (175 MW), SKS Power (300 MW), Jindal India Thermal Power (125 MW), IL&FS Energy (550 MW) and JP Nigrie (100 MW).

The power procuring DISCOMs were Telangana and Tamil Nadu for 550 MW each, West Bengal and Bihar for 200 MW each. Haryana consented to sign for 400 MW.

On the under utilisation of gas-based power plants, Bhalla said:"The PLF (capacity utilisation) of gas-based plants is less than 25 per cent. So you can estimate that at what capacity they are running because of less availability of domestic gas.

"It (policy for allocation of gas to power plants) was part of discussion in the high-level committee. Based on recommendations if something is to be worked out, we will be working out. "

He, however, refused to comment on consolidation of Power Finance Corporation and Rural Electrification Corporation.

When asked about bringing another version of Shakti scheme, he said: "The Shakti scheme is (already) there. People can always get coal. All those who don't have PPAs can take coal linkage under Shakti and look for PPAs in two years time."

Shakti stands for Scheme to Harness and Allocate Koyla (Coal) Transparently in India. The objective of the scheme is to auction long-term coal linkages to power companies.