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Home News Power Sector News Power companies refrain from bidding for Gujarat's low-cost electricity

Power companies refrain from bidding for Gujarat's low-cost electricity

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GujaratPower generators stayed away from bidding for Gujarat government’s tender to acquire 1,000 MW of cheap electricity by selling coal at lower rates after the government allowed flexibility in utilisation of domestic coal amongst power generating stations.

State-run Gujarat Urja Vikas Nigam had floated a tender for 1,000 MW to be supplied to the state for nine months beginning October 2017, wherein the independent power producers must quote a price lower than the ceiling price of Rs 2.82 a unit and get coal that was originally allocated for the state.

But the power producers said the ceiling of Rs 2.82 a unit makes the bid unviable, raising concerns over other such tenders which are in the pipeline. “The cap of Rs 2.82 per unit inclusive of transmission cost with coal supply, quantity & price risk on developer and no offtake guarantee, the cap price was not viable financially,” said Ashok Khurana, DG of Association of Power Producers.

In an attempt to improve availability of cheap coal to power plants which are lying idle or running at low capacity, the government approved flexibility in utilisation of domestic coal among power generating stations. This move allows states to consider the aggregate coal available to it and sell it to more efficient power plants.

Maharahstra too has invited bids for similar tender and its ceiling price is even lower at Rs 2.80 a unit.


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