1. Gujarat to swap coal allocation with efficient plants

Gujarat to swap coal allocation with efficient plants

In an attempt to cut power purchase cost, Gujarat has invited tenders to buy coal-based electricity from independent power producers who would agree to sell power at less than Rs 2.82/unit.

By: | New Delhi | Updated: August 8, 2017 6:38 AM
The reverse auction for procuring 1,000 MW of power through this mechanism would be held on September 8. (Image: Reuters)

In an attempt to cut power purchase cost, Gujarat has invited tenders to buy coal-based electricity from independent power producers who would agree to sell power at less than Rs 2.82/unit. Through the auction, Gujarat will transfer the coal allocated to power generating stations owned by Gujarat State Electricity Corporation (GSECL) to more fuel efficient private power plants. The reverse auction for procuring 1,000 MW of power through this mechanism would be held on September 8. The successful power plant would be selling electricity to the state from October 1 to June 30, 2018. According to data from the Central Electricity Authority, coal-powered GSECL plants’ power sale price range between Rs 2.92 a unit–Rs 5.42 a unit.

If the power plant which wins the tender is located near the colliery itself, then the state can save on coal transportation costs as well, a senior official from Gujarat state utility told FE. The average landed cost of coal for the seven coal-based power units of GSECL is about Rs 4,812 per metric tonne, of which half is accounted as transportation cost. GSECL has allocation from Korba coalfield in Chhattisgarh and Korea Rewa coal field in Madhya Pradesh in ratio of 80:20. The move is expected to bring some respite to power plants, with a total estimated capacity of 28,000 MW, which do not have regular fuel supply arrangements with Coal India.

In the first quarter of FY18, the average plant load factor of thermal power plants of GSECL was 45.4% only. They produced 5,85 million units (MU) of power in the period against the target of 6,055 MU. To meet the state’s demand of about 8,000 MW, the state imports about 1,600 MW from other sources, while the rest is generated from within the state. The state has also opened tenders to purchase 500 MW of power between September 16 and October 15. It has also invited bidders for 500 MW each of wind and solar power. Gujarat will sign 25-year power purchase agreements with the lowest bidders in the respective renewable segments.

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