APP wants the clause restraining coal-linkage holders from participating in the bidding changed
The Association of Power Producers (APP) has appealed to Brihanmumbai Electric Supply & Transport (BEST) to amend the fuel clause in its bid to procure 750 megawatt on a medium-term basis.
APP wants the clause restraining coal-linkage holders from participating in the bidding process changed as it is against the consumer interest and the coal-linkage policy under the ‘Shakti’ scheme wherein coal procurement is permitted for existing coal linkage holders having valid long-term as well as medium-term power purchase agreements (PPAs).
The association has argued it is a well-accepted fact that the power sourced through concessional coal is the cheapest option available to state power utilities. However, the tender document states that “Supplier acknowledges, agrees and undertakes not to use any concessional fuel for production of electricity and supply thereof in pursuance of the provisions of the power purchase agreement.’’
The bids have been invited under standard finance-own-operate model issued by the power ministry on January 16, 2017, restricting usage of concessional fuel.
Already, 19 bidders have participated in the pre-bid conference.
BEST has received Maharashtra Electricity Regulatory Commission’s nod to go in for competitive bidding as its PPA with Tata Power ends on March 31, 2018, and the undertaking expects to procure power through bidding from April 1 next year.
APP director general Ashok Khurana told DNA Money, ‘’The linkage holders get coal at a notified price and are in a position to offer low tariff with long-term coal security which is not available to coal buyers in e-auction and it is costlier than notified price. Imported coal anyway would be a very expensive option. In the circular issued by the coal ministry dated May 22, 2017, the usage of linkage coal has been permitted for medium-term PPAs.
COST-EFFECTIVE
- APP wants the clause restraining coal-linkage holders from participating in the bidding changed
- Power sourced via concessional coal is the cheapest for state power utilities, it says
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