BackBidders for Rs2,600 crore power subsidy to be announced on Tuesday
The names of the qualified bidders on the basis of technical bids will be announced on Tuesday
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New Delhi: Power producers including NTPC Ltd, GMR, GVK and Lanco Infratech are in the fray for second round of auction on Tuesday to bag the Rs2,600 crore government subsidy for buying expensive imported LNG for their idle plants.
“GMR, GVK, NTPC and Lanco were among the companies that submitted bids earlier this month to be qualified for the second phase of auction of financial assistance of Rs2,600 crore under Power System Development Fund set up by the government," a source said.
The names of the qualified bidders on the basis of technical bids will be announced on Tuesday, two hours before the auction begins at 11:00 am, the source added. “The maximum bidding price under the reverse auction has been fixed at Rs4.7 per unit for stranded gas based plant (SGP) and Rs3.39 per unit for domestic gas plants (DGP)," the source said, adding that the firms will bid for a total of 15 Million Metric Standard Cubic Meter Per Day (MMSCMD).
Power ministry had invited technical bids to undertake the reverse auction of the PSDF support to eligible gas-based power plants for a period from 1 October, 2015 to 31 March, 2016, as per the tender. Under the plan, liquefied natural gas (LNG) will be imported and cash-strapped state power distribution companies will be financially supported to buy electricity from them.
Power plants rarely use costly imported LNG as electricity produced from the fuel would cost much more than that from a domestic coal-fuelled plant or a domestic gas-fired plant, and there would be no takers for such expensive power. In the first round, 15 projects were shortlisted through a so-called reverse e-bidding process for supply of electricity to distribution companies that was conducted by state-owned MSTC Ltd.
The successful bidders will be given Letter of Award on 17 September. In the May auction, subsidy support helped revive a cumulative gas-based generation capacity of 10,270 MW resulting in generation of additional 5.70 billion (bn) units of electricity during June to September summer. In the first round, government provided a subsidy support of Rs843.99 crore from the Power System Development Fund to the discoms.
Earlier in May, government revived 10 stranded gas-based power projects under the PSDF scheme. These plants had successfully bid through reverse e-auction process for generating 5.05 bn units of electricity which will be supplied at or below Rs4.70 per unit to the purchaser discom during the peak summer months of 1 June, 2015 to 30 September, 2015, the power ministry had earlier said in the release.
Further, this involved the government support of Rs843.99 crore from the Power System Development Fund to the discoms. The reverse e-auction for the stranded gas based plants was conducted under the newly approved scheme for utilisation of stranded gas based generation capacity.
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