Gujarat has invited new tenders for procuring 1,000 MW power on a short-term basis between August 1, 2018, and June 30, 2019 under the ‘flexible utilisation of coal’ scheme, popularly known as ‘tolling’.
Gujarat has invited new tenders for procuring 1,000 MW power on a short-term basis between August 1, 2018, and June 30, 2019 under the ‘flexible utilisation of coal’ scheme, popularly known as ‘tolling’. Under the mechanism, Gujarat will transfer coal from from Korba coalfield in Chhattisgarh and Korea Rewa coalfield in Madhya Pradesh allocated to power generating stations owned by Gujarat State Electricity Corporation (GSECL) to more fuel-efficient private plants quoting the lowest bid. This is the second time Gujarat is buying power through the tolling policy. It was the first state to do so in August 2017, after the Centre introduced the scheme in May 2016.
The previous tender for 1,000 MW electricity received dismal response with only GMR Chattisgarh participating in the bid, that too with an offer to sell only 500 MW of power. While the ceiling tariff for the reverse auction was kept at Rs 2.82/unit, GMR agreed to sell electricity at Rs 2.81/unit. A senior GSECL official told FE that the ceiling tariff for the reverse auction has been raised to Rs 3.01/unit to reflect higher coal prices and transportation costs.
The new bid invitation comes shortly after the state recently scrapped tenders for 2,000 MW of short-term power for April, May and June as tariffs quoted in the auction ranged between Rs 4.79 and Rs 8 per unit, defeating the purpose of cost optimisation for which the tenders were invited.
The tenders are being invited to compensate for the shortfall of about 3,000 MW of electricity after Adani Power and Essar Power curtailed supplies from their respective imported coal-based power plants in the state after the Supreme Court disallowed rise in imported coal prices to be passed through to electricity tariffs.
The state’s electricity requirement in April was 412 million units (MUs), up 4% from the same month last year. To compensate for the shortage, Gujarat procured more than 1,276 MU from the spot power market in April—which was more than a quarter of the total energy purchased through the exchanges in the month — when the average rate of power at Indian Energy Exchange was Rs 3.9/unit. The landed cost of that electricity would have been more, owing to transmission and open access charges. The average cost at which Gujarat buys thermal power is Rs 3.49/unit.