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| Last Updated:17/07/2019

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Govt ready with scheme to auction PPAs linked with coal supplies


New Delhi | May 28, 2019: The government has readied a scheme to auction power purchase agreements (PPAs) with attached coal supplies from Coal India. The auction of short-term PPAs with coal supplies is expected to help some of the about 10GW power plants idling due to lack of fuel and power contracts.


A senior government official said the auction framework has been prepared with likely allocation of about 12 million tonnes in annual commitment from Coal India Ltd (CIL). “In the proposed auction scheme, the bidders will be informed about the availability of coal supply from the various CIL subsidiaries and mines. Tariff-based competitive bids will be invited from companies based on these inputs," he said.


The official said bids will be invited for 2,500-MW power supply capacity for three years. The proposal is third in a row of such schemes auctioning power purchase agreements. However, the previous two rounds did not have attached coal supplies.


The power ministry kicked off the scheme to salvage stressed assets idling due to lack of PPA opportunities.


In April last year, the government launched a pilot round of the scheme where 1900-MW of stressed power capacity was tied up to states at a price of 4.24 per unit. Seven plants won the power contracts in the pilot round. These include RKM Powergen, Jhabua Power Ltd, MB Power Ltd, SKS Power, Jindal India Thermal Power Ltd, IL&FS Energy and JP Nigrie.


The second round of bidding was concluded in April last year with power plants quoting a higher tariff of 4.41per kWh. The auctions were on reverse e-bid format under which the power producers have to lower tariffs in the online auctions. The tariffs were linked to inflation, unlike in the last round under which they were fixed for three years.


Fifteen power plants of companies like JSW Energy, Jaiprakash Associates, Jindal Power, Sembcorp Gayatri and Essar Power bid for the agreements with states. NHPC, the PPA aggregator for the second round, is in talks with states to purchase power from qualified bidders, the official said. Sources said Jindal Power bid for supplying the highest quantity of 515-mw from its two plants in Chhattisgarh at 4.41 per unit. Adani Power’s Korba West plant has bid for 295-MW while JSW Energy has committed 290-MW.