According to those with knowledge of the situation, the Center will likely offer states about 8 GW of electricity over the medium to long term from projects that are currently idle because they lack coal connections or purchase agreements. States experiencing power outages will pool their demand, which the Center will then auction off to stressed projects using a tariff-based bidding system.
Coal will be designated in the auctioned power purchase agreements for the plants that place the lowest bid.
A senior government official said, “The bids will be an opportunity to states that were caught unprepared to meet power demand surge over the last few months.” Additionally, it will give idle power plants a chance to start up, which will increase the supply of electricity.
Lack of agreements with power distribution companies and fuel supply arrangements has resulted in the stagnation of commissioned coal-based power projects with a capacity of about 8 GW.
“In March and April, when there wasn’t a lot of wind and hydro generation, many states struggled to meet the demand for electricity. Power generation companies were receiving frantic calls, “said the official.
The duration of the long-term contracts has been shortened from 25 years to 15 years, while the medium-term contracts are anticipated to last for five years.