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The imported coal-based ultra mega power projects may have to blend domestic coal with their produce if the power procurers – state electricity distribution utilities – want it. This has been proposed by the Power Ministry in the changes suggested in the standard bidding documents of the imported coal-based ultra mega power projects.
The Ministry has sought comments on this and several other proposals by January 15. According to the proposal, the provision for blending will be listed in the power purchase agreement. The power procurers at their discretion may give a notice of 30 days for the generator to start blending domestic coal up to 30 per cent of the total requirement.
However, the procurer will have to identify the source of domestic coal and also reach an agreement with the generator on the revision of variable charge.
The procurer can opt for this move if it feels that domestic coal will be cheaper and cheaper tariff can be sought. Also this would be in case if there is a cost increase in the international coal price which warrants a change in tariff. Such a move can be in place only if the domestic coal is at least 10 per cent cheaper on a ₹ per kilocalorie basis than the landed cost of the imported fuel. The switch back to imported coal can only happen after the procurer desires. However, the procurers’ right to ask for blending can only be exercised once in the contract period, unless mutually agreed.
Apart from this the proposals are similar to the changes recommended in the standard bidding documents for the domestic coal based ultra mega power projects.
The proposals include the nodal agency handling the bidding for the UMPPs setting up an operating SPV, through which the successful bidder will develop the project and an infrastructure SPV, which will be handed over to the state distribution utility.
The land required for construction of the power station will be under the infrastructure SPV.
Prior to the signing of the power purchase agreement or transfer of the operating SPV to the winning bidder, whichever is later, the infrastructure SPV shall transfer the critical land for the power station on a lease basis.
Land requirement for the power station will be bifurcated into ‘critical’ and ‘non-critical’. While the ‘critical’ land required for achieving the commercial operation of the power plant is proposed be acquired before it is handed over to the developer, the remaining land has to be acquired by the developer.
The entire cost of land – both critical and non-critical – will be mentioned in the power purchase agreement.
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