MNRE Will Invite Bids From States For 8,000 MW Power From Stranded Thermal Plants

RK Singh, Union Minister of Power and New and Renewable Energy (MNRE), said on June 26 that the government will invite bids from the states to sell electricity generated from 8,000 megawatt (MW) thermal capacities without PPAs after aggregating the demands. About 8,000 MW of thermal capacities across the states in India are without any power purchase agreements, said Singh speaking to a news agency.

As part of the initiative to boost the domestic capacity, the Minister has been quoted as saying that the government is committed to a solution requiring the states to send their respective requirements of power after which the bids will be invited. The statement has given rise to a confusion as to how aggregation of the demands will be followed by a call for the bids, based on which the PPAs will be signed. Typically, these thermal plants require prices in the range of Rs 3.75 to Rs 5 to break even .

Elaborating further, RK Singh added, “We will aggregate (states demand) and call on for bids and based on the bids, whoever puts in the lowest bids, PPAs will be signed. Once PPAs are signed, they (states) will get the power. There are also some thermal capacities undergoing the National Company Law Tribunal (NCLT) proceedings, and the government has already taken several steps, including meeting with the bankers, to resolve the issue at the earliest so such plants can start operations. There are some projects in the NCLT. The country has 17,500 MW plants, which run only on imported coal. Out of that, 2,500 MW were under the NCLT. I had a meeting with bankers etc. We worked out on ways and means of starting this,” he said.

The move clearly indicates the government’s resolve to keep the power situation in the country stable in the post monsoon period and beyond, on the assumption of a continued rise in demand. Presently, even as supply is barely meeting demand, the potential for demand expansion remains strong if the government target of 24×7 power for all by 2024 is to be considered. Renewable energy capacity growth is not considered adequate to fulfil that demand clearly.

In order to cut down on import reliance, the Union Ministries of Power and New and Renewable Energy jointly proposed last month a Rs 1000 crore worth scheme inviting the companies for establishment of three manufacturing zones in the country by 2026-27, two in a brownfield on already developed land and one greenfield manufacturing zone in a coastal area of the country.