NHPC to cancel 2520 Mw bids under power purchase agreement over high tariff

The second round of the pilot scheme for procuring power from thermal units that do not have any power purchase agreement (PPA) could be cancelled, owing to high tariff quoted by the units. State-owned NHPC Limited conducted the second round, which saw lowest tariff of Rs 4.41/unit by 25 companies.
 
Senior executives confirmed the development, saying no state had agreed to purchase power from these units at this rate. “We will re-issue the tender. Except Jam­mu & Kas­hmir and Tela­ngana, no state has come forward to purchase power at this tariff,” said an official.
 
Supply from this bid was to start from October 2019, so the NHPC believes they would be able to re-issue and conclude the tender. In April, the NHPC received bids from leading privately run power producers, including Essar Power, Adani Power, Jaypee, Jindal Power, etc. NHPC was the aggregator for buying power from stressed power units and sell to states.

 

This arrangement would be for three years for the units, which have coal supply but not power purchase agreements with any state. The company planned to procure 2500 Mw from stressed units and reach out to states to buy it. This was the second phase of the pilot scheme by the power ministry to revive stre­ssed units. In the first phase, PTC India was the aggregator.
 
“As an aggregator, NHPC will get trading margin from power distribution companies. We would also give 2 per cent discount for the discoms that pay on time and 2 per cent surcharge for those who pay late,” Balraj Joshi, NHPC chairman and managing director, had told Business Standard in March.

 
The scheme would have entailed transaction of electricity of 18,615 million units at 85 per cent operating ratio of 2,500 Mw and turnover of more than Rs 7,000 crore (appr­oximate), the NHPC had said.
 
However, the tariff discovered was higher than the first phase when it was Rs 4.24/unit and selected capacity was 1,900 Mw. Sev­eral states, including Telan­gana, Tamil Nadu, West Ben­gal, Haryana, and Bihar, sig­ned up to purchase power from these un­its. Stressed assets such as RKM Powergen, Jhabua Po­wer, SKS Power were among the shortlisted suppliers.
 
The Ministry of Power in April 2018 had issued guidelines for a pilot scheme to facilitate aggregation of procurement of power from commissioned coal-based power plants through competitive bidding. This was in line with the government’s effort to assist stressed power assets.