Is investor interest reviving in the
Indian power sector? The bid for supplying 450 megawatts (MW) to Kerala
seems to suggest that it indeed is; 23 firms, the who’s who of Indian
power producers, have pre-qualified for the bid.
The interest is
being attributed to the new bid norms that have been put in place, as
well as a clean-up of the books of state electricity boards (SEBs). The
former has lowered the risk for electricity generating companies and the
latter has enabled SEBs to resume power purchases.According to
documents available on the Kerala State Electricity Board’s (KSEB)
website, the 23 who have pre-qualified for the bid include Adani Power
Ltd, Adhunik Power and Natural Resources Ltd, Bharat Aluminium Co. Ltd,
DB Power Ltd, East Coast Energy Pvt. Ltd and Essar Power M.P. Ltd.GMR Kamalanga
Energy Ltd, Ideal Energy Projects Ltd, IndiaBulls Power Ltd, Jaiprakash
Power Ventures Ltd, Jindal Power Ltd, KSK Energy Ventures Ltd and Lanco
Power Ltd have also pre-qualified.
The KSEB
contract is the first such offered by an SEB this fiscal year. Queries
posted on the KSEB website on Wednesday remained unanswered as of press
time.These bids have
been called through the so-called Case 1 route, wherein the developers
have to design, build, finance, own and operate a power plant for a
period of 25 years.Bids for power
procurement are sought in two ways. In Case 1, the quantum and time
period of power procurement is identified, but fuel type, sources and
the plant location are not specified. In a Case 2 bidding scenario, such
as the one for so-called ultra mega power projects (UMPPs) that are of
the order of 4,000MW, resources such as land, fuel and water linkages
are identified and in some cases also provided to the developer quoting
the lowest.
“This is a test
case for the new Case 1 bidding document, where bidders have to capture
all risks and translate to a single first-year tariff number,” said
Debasish Mishra, senior director, consulting, Deloitte Touche Tohmatsu
India Pvt. Ltd.“First year number would get escalated as per the index prescribed in the bid document,” Mishra said.Earlier Case 1
norms required power firms to quote year-on-year tariff increases for
the entire 25-year duration of the power purchase agreement (PPAs).
Source: Mint
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