Power producers seek PPA signatory role in 5,000 MW combined tariff bid

Sumit Maitra

Thermal power companies want to participate directly in the 5,000- Mega Watt tender floated by Solar Energy Corporation of India for bundled renewable plus coal-based power tariff bids.

Earlier in March, Solar Energy Corporation of India floated tender inviting Expression of Interest from only Renewable Energy (RE) developers for supply of 5,000 MW of electricity from grid-connected projects which would be bundled with power from coal-fir ed thermal projects so that round-the-clock (RTC) power can be provided under single contract.

The tariff-based competitive bidding of a single tariff for renewable energy complemented with thermal energy would lead to Power Purchase Agreements with successful RE developers for a period of 25 years.

The Thermal Power Producers (TPPs), for whom new PPA opportunities are hardly coming on their way, want to be signatories to those agreements as well along with RE power producers.

“As long-term power procurement tender opportunities have been almost nil in the past several years, the tender floated by SECI is extremely important to ensure that bidders who have secured coal linkages through LoA route and Shakti B(iii) are able to utilize and access their linkage coal,” Ashok Khurana, director general, Association of Power Producers have said in a letter written to power secretary Sanjiv Sahai.

Power ministry vide its Gazette Notification dated July 22 issued guidelines for competitive bidding process following which SECI amended certain provision of the bidding document in line with those guidelines.

APP, in its letter, a copy of which is available with Coal Insights, has also requested some changes in some of those bidding conditions to facilitate greater participation from thermal power producers leading to lower tariff.

Key Bid terms issues

Usage of linkage coal

RE developer is required to enter into an agreement with the thermal power projects. However, under the earlier Letter of Arrangement regime as well Shakti scheme, access to linkage coal is granted only when the power project executes PPA with a Discoms or a trading companies including SECI which in turn should have back-toback PPA with any Discoms.

According to APP, there is uncertainty as to whether the agreement with RE developer would allow thermal power producers to access coal under their existing linkage since they are not party to the PPA with SECI.

To provide clarity and provide comfort to bid applicable for a long 25 years, APP has suggested allowing either of the two options:

1. Thermal generator may be made a signatory to the PPA between bwteen RE developer and SECI

2. Eligibility conditions in the FSA (under both LOA route and SHAKTI scheme) may be amended to add the option of ‘RTC (round-the-clock) PPA by RE developer, complemented with thermal power’ under the definition of PPA under Clause 1.1 sub clause (gg) of FSA (under LOA route) and Clause 1.1.46 under Shakti B(iii)