Method to be applicable for Tamil Nadu and Odisha projects; index-linked floor and ceiling prices for coal to be also fixed
Project developers for the proposed ultra mega power plants (UMPPs) in Odisha and Tamil Nadu would be decided based on the first-year power rate they offer.
A levelised rate for the entire period of the power purchase agreement was needed for UMPPs awarded earlier. Besides, thePower Finance Corporation, nodal agency for awarding UMPPs, would be setting a floor and ceiling price over an established benchmark, to determine the energy charge for the imported coal-based UMPP in Tamil Nadu.
A senior official told Business Standard this new model for selection of the bidder would help reduce uncertainties and aggressive bidding, preventing offers that are unviable in the long run. For subsequent years, a well-defined trajectory for prices each year would be set by PFC after discussion with power procurers. Project developers would be required to follow that trajectory while quoting the price each year. “This trajectory would be based on the depreciation, wholesale price index and other such components,” he said.
A two-stage bidding process is to be followed for the two UMPPs. In the first stage, companies would be giving their requests for qualification by November 11. PFC would shortlist qualified bidders, who would then file a request for proposal (RFP). “The floor and ceiling in the case of the Tamil Nadu UMPP would be set at the RFP stage,” he said.
Bidders for the Rs 25,200-crore Odisha UMPP, to come up near Bedabahal village in Sundargarh district, would be quoting a fixed charge in the rate component.
For the energy charge, a variable portion of the rate, the cost per power unit, will be fixed in consultation with procurers.
This charge would cover the mining cost of the project developers, since Odisha UMPP is a pit-head project.
The rights to mine coal from linked mines would, however, be passed on to a special purpose vehicle of the procurers, unlike in the case of the Sasan and Tilaiya UMPPs
(MP and Jharkhand), where project developers got mines when the ownership of a shell company created for the project was passed on to them.
The developer would now only get the licence to mine coal and a lease on project land; so, these cannot be used as collateral for borrowing money. Besides, the surplus coal available from these mines would also belong to the power procurers and governed by the surplus coal policy currently under work in the Union government, said the official.
Power from Odisha would be supplied to nine states, including the lead procurer, Odisha (1,300 Mw), Punjab (500 Mw) and Haryana, Madhya Pradesh and Rajasthan (400 Mw each).
The Rs 24,200-crore Tamil Nadu UMPP would be located near Cheyyur village in Kancheepuram district. Power from the coastal project would be supplied to seven states, including the lead procurer, Tamil Nadu (1,600 Mw), Karnataka (800 Mw), Andhra Pradesh (400 Mw), Kerala and Uttar Pradesh (300 Mw each) and Punjab (200 Mw).
Rate revision pleas for three of the four UMPPs awarded earlier are currently with the Central Electricity Regulatory Commission. In the case of the imported coal-based Mundra UMPP (in Gujarat), developed by Tata Power, a change in Indonesian law has impacted the price of imported coal, rendering the quoted rate of Rs 2.44 a unit (Kwh) unviable for the company. Reliance Power has filed a rate revision request for its pit-head based UMPPs at Sasan and Tilaiya.