The Power Ministry today launched a mobile application and a portal to help states select power producers through e-bidding to procure power by transferring to them domestic coal under the flexible utilisation of dry fuel policy. Initially, this will help states to save up to Rs 4,000 crore a year and they would be able to save around Rs 20,000 crore in 5 years, it said. Power Minister Piyush Goyal launched the MERIT app (Merit Order Dispatch of Electricity for Rejuvenation of Income and Transparency)’ and the portal for providing e-Bidding solution to states to select Independent Power Producers (IPPs). “The app and the web portal would result in optimum utilisation of Coal which would save the consumer close to Rs 20,000 crores five years down the line,” Goyal told reporters. He said use of technology to increase transparency and accountability and transfer maximum benefit to the consumer reflects a 360-degree approach of a ‘government in action’. The merit order stack is a common approach to the problem of minimising the sum of generators’ operating costs while honouring the operational constraints of the available generation to supply the demand in a secure and reliable manner. A senior official also said that initially, this will help states save Rs 3-4,000 crore per annum while procuring power.
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The Tariff Policy, 2016 provides that the States/DISCOMs shall follow merit order for procurement of power and there should be uniformity in merit order mechanism. Most of the states follow merit order operation; however, details in this regard needed to be made transparently available. The app displays extensive array of information regarding the merit order such as daily state-wise marginal variable costs of all generators, daily source-wise power purchases of respective states/UTs with source-wise fixed and variable costs, energy volumes and purchase prices. The app also gives information regarding reasons for deviation from merit order such as must run conditions, transmission constraints etc. The flexibility in utilisation of domestic coal scheme envisages transferring coal to more efficient IPPs generating stations, leading to lower generation costs and ultimately lesser cost of electricity for the consumers.
Under the e-bidding process on the portal, the successful bidder will be selected through e-Reverse Bidding process. The Cabinet, on May 4, 2016, approved the proposal for allowing flexibility in utilisation of domestic coal amongst power generating stations. The methodology for use of transferred coal in IPPs generating stations was issued by Ministry of Power on February 20, 2017. The ministry along with PFC Consulting and MSTC has developed the e-bidding portal.