NTPC offers to sell power directly to India Inc

By: |
July 28, 2021 3:15 AM

NTPC traditionally supplies power directly to discoms, mostly under long-term power purchase agreements (PPAs). This is the first time the company is offering to sell power to corporates and industrial consumers on an open access basis.

Average power tariff of the company was Rs 3.73 per unit in April-June 2021 compared to Rs 3.98 per unit in the same period a year ago.Average power tariff of the company was Rs 3.73 per unit in April-June 2021 compared to Rs 3.98 per unit in the same period a year ago.

In a deviation from its standard practice, state-run power producer NTPC has invited expressions of interest (EoIs) from electricity distribution companies (discoms) and industries to purchase electricity from its “spare generation capacity”.

NTPC traditionally supplies power directly to discoms, mostly under long-term power purchase agreements (PPAs). This is the first time the company is offering to sell power to corporates and industrial consumers on an open access basis.

Currently, all 52,000 megawatt (MW) of NTPC’s operational capacity and 15,000 MW of under-construction coal-based stations are tied up with assured power off-take agreements. In fact, in the three months before the January 2011 deadline for shifting to competitive bidding regime, the company had entered PPAs for 40,840 MW of its capacities on a ‘cost-plus’ basis with 37 state-run discoms.

“However, NTPC may have some spare generation capacity available for sale in open market,” and it “intends to sell this energy to the interested buyers”, the company said in the notice inviting EoIs.

The development closely follows the Central Electricity Regulatory Commission allowing one of Delhi’s discoms, BSES, to approach the Union power ministry to de-allocate 621 MW of electricity supply from NTPC’s Dadri-I generating station earlier in the month.

The government has ruled that discoms can stop buying power from plants that are older than 25 years, and the Dadri-1 unit is one such unit. Rajasthan has also recently decided to stop procuring electricity from NTPC’s 410 MW Anta gas plant, which is more than 25 years old.

However, experts have said not all of the 10,130 MW of NTPC’s power plants which have crossed 25 years will be freed up, as more than 8,000 MW of these units are pit-head stations, and discoms are not likely to give up the cheap power coming from there.

NTPC also plans to have a 60,000-MW green power generation base by 2032 as against the current 1,400 MW, and the upcoming renewables capacity is not tied up with PPAs. “Further, if required, NTPC can supply green power also and is ready to install new renewable energy capacity,” the company’s EoI notice said.

NTPC is also offering power purchase portfolio management services for corporate and industrial entities, indicating its intention to diversify into emerging businesses and markets across the power value chain from being a traditional pure-play electricity generator.

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