Govt working on centralised bidding to reduce cost of electricity

Power purchase to be eased for states; fixed cost to be reduced for assured offtake, demand-supply to be aggregated

A novel idea is in the works to enhance power procurement by states through reducing the cost of electricity.

New centralised bidding will be held and quotations for lump sum tariffs will be invited from power developers. This will also involve power aggregation and disbursement in accordance with cost and the demand from states.

Tariffs will have to be quoted with a “very nominal” fixed-cost portion. Power developers would bid against the cap on fixed cost, said officials. 

Tariffs for coal-based power plants consist of “fixed cost” and “variable cost”. Fixed cost is the capital cost of the power plant