The Ministry of Power (MoP) has issued a mechanism to facilitate power procurement on finance, own and operate basis by various states in the country against which coal linkages would be supplied under SHAKTI policy.
The process involves execution of tariff-based competitive bidding to stipulate the coal linkage allotment that would be utilised in catering to power requirement.
The provision was already spelt out under para B(v) of the SHAKTI policy which underlines that “Power requirement of group of states can also be aggregated and procurement of such aggregated power can be made by an agency designated by the Ministry of Power or authorised by such states on the basis of tariff-based bidding.”
However, the implementation of this provision was delayed in the absence of adequate documentation required to execute competitive bidding.
In order to expedite the process, MoP has released detailed guidelines enlisting the various modalities involved in the bidding process and also elected PFC Consulting Limited to act as nodal agency.
Projection of coal requirement
The nodal agency would assess power requirement by a group of states based upon intended quantum of electricity in terms of mega-watt (MW) and its duration of supply.
Based on the study, the agency would work out the quantity of domestic coal required on the basis of CEA norms. Thereafter, MoP will send proposal for coal requirement along with duration and estimated commencement date of coal supply to the Ministry of Coal for further consideration.
Sources of coal will be identified by state-run miners-Coal India Ltd and Singareni Collieries Company Ltd as per requisition received from the nodal agency.
Bidding process
For power procurement, bids from power generating companies would be evaluated in a single stage process. The bid document would encompass information on quantum of electricity along with sources of coal identified to meet the aggregate requirement.
The bidders are required to submit separate technical and price bids. Of this, the price bid comprise offer for power capacity and source wise tariff. In particular, the multi-part tariff structure, with separate fixed charge and variable charge components, forms the basis for bid evaluation.
Post bidding, the state electricity boards would be able to procure electricity on a medium-term for a period extending from one year till seven years, while for long-term, the tenure of supply is between 12-15 years.
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