Govt proposes new bidding rules for coal blocks
3 Sept 2012 11:08 AM IST
The government has proposed mandatory efficiency rate for electricity generation as well as 25-year long purchase pacts for developers planning to bid for future coal-fired projects.
The changes, proposed to be part of the revised bidding norms for future projects, are aimed at providing ‘relative advantage available with developers with different fuels to the end consumers,’ according to the Power Ministry.
Sources said the Ministry proposed these changes to various developers, including private players, at a meeting held on 21August.
Official documents seen by PTI showed that instead of multiple parameters for bidding of power projects, there would be only a single variable for future plants.
‘Bidding will be on the basis of single variable rather than multiple variables, (that is) capacity charge with the first year tariff instead of multiple biddable parameters as in the present Standard Bidding Document (SBD),’ one of the official documents said.
Capacity charge implies fixed cost involved in generating power. The Ministry has also mooted evaluation of bids to be based only on ‘non-biddable pre-specified Station Heat Rate (SHR)’.
This criteria would be applicable for Case I (where developer is free to chose location and fuel) and Case II (where location is specified) bidding.
SHR indicates the efficiency of a power plant and lower the rate, higher would be the electricity generation.
Another proposal is to make it compulsory for project developers to sign 25-year long Power Purchase Agreements (PPAs) with procurers.
However, no changes have been proposed for future projects that would be based on imported coal.
The government is in advanced stages of finalising revised SBDs for future power projects, amid acute fuel scarcity and regulatory hurdles hurting domestic power sector.
The country is expected to have new capacity of over 80,000 MW in the 12th Five Year Plan (2012-17), with majority coming from private sector. However, industry sources said that many of the private power producers are opposed to certain proposed clauses especially on PPAs.
According to industry sources, PPAs for such long durations would spell for doom for short and medium term power trading markets.
If implemented, there would be no electricity left for trading in power exchanges apart from reducing the choices for consumers, they added. Currently, about 11 per cent of total power generated in the country is transacted through the short-term market and three per cent is traded through power exchanges.At present, power prices in the open market is around Rs 3.51 per unit compared to over Rs 7.15 per unit, four years back. Industry sources attributed the fall to competition in the market as well as presence of captive power producers. The Power Ministry has also proposed that escalable component of tariffs for electricity generated from future projects would be based pre-specified.
The changes, proposed to be part of the revised bidding norms for future projects, are aimed at providing ‘relative advantage available with developers with different fuels to the end consumers,’ according to the Power Ministry.
Sources said the Ministry proposed these changes to various developers, including private players, at a meeting held on 21August.
Official documents seen by PTI showed that instead of multiple parameters for bidding of power projects, there would be only a single variable for future plants.
‘Bidding will be on the basis of single variable rather than multiple variables, (that is) capacity charge with the first year tariff instead of multiple biddable parameters as in the present Standard Bidding Document (SBD),’ one of the official documents said.
Capacity charge implies fixed cost involved in generating power. The Ministry has also mooted evaluation of bids to be based only on ‘non-biddable pre-specified Station Heat Rate (SHR)’.
This criteria would be applicable for Case I (where developer is free to chose location and fuel) and Case II (where location is specified) bidding.
SHR indicates the efficiency of a power plant and lower the rate, higher would be the electricity generation.
Another proposal is to make it compulsory for project developers to sign 25-year long Power Purchase Agreements (PPAs) with procurers.
However, no changes have been proposed for future projects that would be based on imported coal.
The government is in advanced stages of finalising revised SBDs for future power projects, amid acute fuel scarcity and regulatory hurdles hurting domestic power sector.
The country is expected to have new capacity of over 80,000 MW in the 12th Five Year Plan (2012-17), with majority coming from private sector. However, industry sources said that many of the private power producers are opposed to certain proposed clauses especially on PPAs.
According to industry sources, PPAs for such long durations would spell for doom for short and medium term power trading markets.
If implemented, there would be no electricity left for trading in power exchanges apart from reducing the choices for consumers, they added. Currently, about 11 per cent of total power generated in the country is transacted through the short-term market and three per cent is traded through power exchanges.At present, power prices in the open market is around Rs 3.51 per unit compared to over Rs 7.15 per unit, four years back. Industry sources attributed the fall to competition in the market as well as presence of captive power producers. The Power Ministry has also proposed that escalable component of tariffs for electricity generated from future projects would be based pre-specified.
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