Govt launches pilot scheme to buy 2.5 GW from power plants not having PPAs

State-run Power Fiance Corporation (PFC) today said the government has launched a pilot scheme to procure 2,500 MW electricity for 3 years under medium term arrangement from commissioned power plants without power purchase agreements.

The bids under the scheme will be invited in the first week of May. The main purpose of the scheme is to revive commissioned power plants which are unable to sell electricity in the absence of valid power purchase agreements. These plants can bid for power supply under the scheme.

"The government kicks off a Pilot Scheme for Procurement of Aggregate Power of 2,500 MW on competitive basis for 3 (three) years under medium term i.e. from generators with commissioned projects but without Power Purchase Agreement," PFC said in a statement.

Power Ministry had recently issued the model bid documents, PAPP (Pilot Agreement for Procurement of Power) and PPSA (Pilot Power Supply Agreement) on April 6, 2018. The guidelines for the said scheme was issued on April 10, 2018.

The PFC arm PFC Consulting Ltd has been appointed as the Nodal Agency and PTC India Limited as the Aggregator. The PTC India will sign three-year (mid-term) agreement for power procurement with successful bidders and Power Supply agreement with the Discoms (distribution companies).

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

The PFC Consulting is in process of inviting the bids in first week of May under the scheme. The bidding will be conducted on the DEEP e-Bidding Portal and with L1 matching for bucket filling without reverse auction. It is expected that this scheme help to revive the power demand which has affected the generators not having Power Purchase Agreements, it added.

According to industry sources, the move will help nearly 12 GW commissioned thermal power plants get the medium-term power purchase agreement (PPA) which is a pre-requisite for getting coal linkage.

Presently out of the 40 GW stressed coal based power generation capacity, 28 plants of 24 GW worth Rs 1.44 lakh crore are commissioned. Nearly half of these capacities (12GW) do not have coal linkage because of no PPAs.