Coal source to decide bidding norms for new power projects

New bids for domestic coal-based power projects will depend on the source of the fuel. The Power Ministry on Thursday decided the standard bidding norms for power projects to be put out on auction under the 12th Five-Year Plan period. The new norms would be applicable prospectively to projects based on domestic coal and no changes have been made for units fired by imported fuel.

This has now opened up the route to bid for ultra mega power projects (UMPP) in Odisha, Tamil Nadu and Chhattisgarh.

“We have almost finalised the bidding document. We believe that most concerns related to availability of indigenous coal and price fluctuations have been addressed. The bidding document would be ready in a month after the draft is been vetted by legal team,” the Power Secretary, Mr P. Uma Shankar, told mediapersons.

According to the new provisions, norms would differ based on the source of coal. This means a power project based on linkage coal would be different from a unit attached to a captive mine. The new bidding norms would share the risk between developer and the procurer. The developer of the project would be able to mitigate any losses arising out of non-availability or fluctuations in the price of coal.


“Concerns of developers in terms of domestic fuel on availability and pricing have been taken care of. Competition would be on capacity charge that is fixed cost. They would bid for fixed station heat rate. At the same time, single variable cost would compare different bidders,” Mr Shankar explained.

However, the nodal Ministry decided to make no changes to norms for power units based on imported fuel. “We do not envisage any changes in projects based on imported coal. The risk is hedged in different compartments,” the Secretary added.

The new standard bidding documents are expected be ready for use by August. This will lead to awarding of the 4,000 MW UMPP at Bedabahal in Odisha that has been hanging fire since last year. This would be followed by awarding of two more UMPPs at Cheyyur in Tamil Nadu and Sarguja in Chhattisgarh
Source: BL


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