Central Electricity Regulatory Commission (CERC) has recently adopted the tariff for procurement of power of 2,500 mw under “Pilot Scheme-II”, for a period of three years.
In its order dated December 22, 2021, CERC has adopted the tariff of Rs3.26 per kwh, under the aforementioned scheme for a total quantum of 820 mw. This tariff was discovered through a transparent e-bidding, followed by reverse e-auction, conducted by nodal agency PFC Consulting Ltd.
It may be mentioned that the entire quantum of 2,500 mw was tied up with power generators. However, the bidding process experienced delay due to the COVID-19 situation. Following this, there was a drop in electricity demand and some generators (suppliers) did not provide extension of their bid validity. The process was therefore reduced to five suppliers, for a total quantum of 820 mw.
It was the responsibility of PTC India, as the aggregator, to find buyers for the power generated, and facilitate Agreement for Procurement of Power (APP) with successful bidders and back-to-back Power Supply Agreement (PSA) with the distribution licensees.
This pilot scheme, it must be appreciated, aims to create a market between coal-based power generation stations that are commissioned but without a power purchase agreement, and interested distribution licensees.
During the second half of October 2021, PTC India signed these pacts with five generators and three distribution licencees, as tabulated below.
The distribution licensees (procurers) are: Tamil Nadu Generation & Distribution Corporation Ltd (Tangedco), Kerala State Electricity Board Ltd (KSEB) and Jammu & Kashmir Power Corporation Ltd (JKSCL).
Some of the generators that had participated but dropped out as they could not provide validity extension of their bids were: Raigarh Energy Generation Ltd, Jaypee Nigrie Super Thermal Power Ltd, Sembcorp Energy India Ltd and GMR Kamalanga Energy Ltd.
Involvement of CERC
If the generation and sale of power were to take place in the same Indian state, it would suffice if the tariff were adopted by the respective state regulatory commission. However, in this case, the generators are located in different states – Odisha, Madhya Pradesh and Chhattisgarh – and are supplying power to licensees spread across UT of J&K, Kerala and Tamil Nadu. This therefore makes the procurement/purchase a “composite scheme”, warranting the approval from Central Electricity Regulatory Commission (CERC).
Background:
Here is a chronological background, leading up to the adoption of tariff by CERC.
January 2019: The Union power ministry introduces a “Pilot Scheme-II” to facilitate procurement of 2,500 mw for three years from power generators having coal-based power plants, which are commissioned but are without a power purchase agreement (PPA). PFC Consulting Ltd (PFCCL) was named as the nodal agency.
January 2020: PFCCL appoints PTC India Ltd as the aggregator, following an e-tendering process.
February 2020: PFCCL, after initiating e-tendering and e-reserve auction on DEEP e-bidding portal, communicates final result and the discovered price of Rs.3.26 per kwh.
June 2020: PTC India (aggregator) contacts various distribution companies for sale of power under the scheme. COVID-19 results in disruption of business activity and subdues power demand. Only five bidders (tabulated above) give extension of bid validity.
October 2021: PFFCL issues letters of award to the five successful bidders, for aggregate capacity of 820 mw. PFFCL signs APPs with the generators and PSAs with distribution companies.
December 2021: CERC, following petition filed by PFC Consulting Ltd, adopts tariff of Rs.3.26 per kwh under Pilot Scheme-II.
Featured photograph (source: spgcl.com) shows an overview of the coal-fired power plant of SKS Power Generation (Chhattisgarh) Ltd, located in Raigarh district of Chhattisgarh.
