Home India Adani Power, Essar Power place lowest coal-based tariffs in years
Adani Power, Essar Power place lowest coal-based tariffs in years

Adani Power, Essar Power place lowest coal-based tariffs in years

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Sources said Adani Power has quoted Rs 3.26 per unit for supply of 700-mw from two its plants in Raigarh and Raipur, while Jindal Power Ltd bid for 420-mw of supply from two plants. Essar Power has quoted for 260-mw, while Jindal India Thermal Power for 270-mw.

New Delhi: A dozen power plants of companies like Adani Power, Jindal Power, GMR Energy and Essar Power have quoted Rs 3.26 per unit tariff for power supply to states, the lowest bid from coal-based power projects in years.

Experts said the tariff, lowest ever for medium-term power contacts, was a desperate move by the stressed thermal power sector, which is facing intense competition from solar and wind power plants, but the contracts will help them repay portion of their debt.

The tender was called under round two of the Centre’s scheme to aggregate 2,500-mw power purchase agreements (PPAs) for states by PFC Consulting Ltd, which is the nodal agency for the scheme. PTC India is the aggregator for the scheme.

Sources said Adani Power has quoted Rs 3.26 per unit for supply of 700-mw from two its plants in Raigarh and Raipur, while Jindal Power Ltd bid for 420-mw of supply from two plants. Essar Power has quoted for 260-mw, while Jindal India Thermal Power for 270-mw.

Jaypee’s Nigrie power plant has bid for supply of 200-mw, while MB Power, Sembcorp Energy and GMR Energy have quoted for 150-mw each, they said. SKS Power and DB Power have bid for 100-mw supply each.

These companies matched the L1 price of Rs 3.26 per unit for total supply of 2,500-mw PPAs sought under the scheme. The companies will supply electricity for three years and will be allowed annual escalation at the rate of 50% of the WPI.

The contracts will help the plants meet part of their debt obligations, the sources said. Lack of PPAs is one of the key reasons for stress in the power sector, besides factors such as promoters’ equity crunch, no coal supply, and regulatory and contractual issues. Electricity distribution companies have not called long-term contracts in the last few years.

Association of Power Producers director general Ashok Khurana said it is a very positive sign for thermal power projects and a welcome move for the consumers.

PFC Consulting had started the bid process again on December 27, 2019. Earlier the bid process for round two of the scheme was carried by NHPC in February 2019 and was cancelled due to lack of response from state discoms.

Power Finance Corp chairman and managing director Rajeev Sharma had last week said that the company was expecting a low tariff below Rs 4 per unit in response to the scheme that was started in April 2018 by the power ministry to salvage stressed assets idling due to lack of power offtake agreements.

Seven projects of RKM Powergen, Jhabua Power Ltd, MB Power Ltd, SKS Power, Jindal India Thermal Power Ltd, IL&FS Energy and JP Nigrie had won 1900-mw contracts at a price of Rs 4.24 per unit in the first round of the scheme that was launched in April 2018.

Source: economictimes.indiatimes
Anand Gupta Editor - EQ Int'l Media Network
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