Ministry of Power Launches Scheme for Procurement of Aggregate Power of 4500 MW

The Ministry of Power has launched a scheme for procurement of aggregate power of 4500 MW on competitive basis or five years on Finance, Own and Operate (FOO) basis under B (v) of Shakti policy.

PFC Consulting Limited (a wholly owned subsidiary of PFC Ltd) has been designated as the nodal agency by the Ministry of Power. Under the scheme, PFC Consulting Ltd has invited bids for the supply of 4,500 MW. The supply of electricity will commence from April 2023. The Ministry of Coal has been requested to allocate around 27 MTPA for this.

The utilities that have evinced interest for the scheme are Gujarat Urja Vikas Nigam Ltd, Maharashtra State Electricity Distribution Company Ltd, Madhya Pradesh Power Management Company Ltd, New Delhi Municipal Corporation and Tamil Nadu Generation and Distribution Corporation Ltd. The last date for the bid submission is 21 December, 2022.

It is for the first time that bidding is being carried out under B(v) of Shakti scheme. At the same time, the revised PPA for medium term is being used in this bidding. This scheme is expected to help the states that are facing power shortage and also help idle/underutilised generation plants to increase their capacities.

The Ministry of Power had notified the guidelines for procurement of power on Finance, Own and Operate (FOO) basis under para B (v) of the Shakti policy on 25th October 2022. The methodology for coal allocation as per provisions of Para B (v) of Shakti policy was issued on 11 May, 2022.

India has a large fleet of gas based power plants (over 15 GW) that have been rendered idle, reducing available grid capacity for use. These plants, idled due to higher gas prices than expected, even before the Russian invasion of Ukraine virtually made it impossible, were to play a role in gas playing the role of a transition fuel as coal use was wound down and renewables moved up. However, the country now faces the tough prospects of depending even more on coal till the time enough renewables capacity comes up, or gas prices drop down to a level where some of this idle capacity can be utilised.