NTPC arm floats tender for buying 4,000 MW gas-based power for ‘crunch period’

New Delhi: NTPC Vidyut Vyapar Nigam Ltd (NVVN), a subsidiary of Maharatna PSU NTPC Limited, has been tasked with facilitating the supply of 4,000 MW RTC gas-based power during the identified crunch period between April 10 and May 16 when power demand is expected to peak. The power procured by NVVN will be sold in the Day-Ahead Market segment of power exchanges. According to a tender document floated on March 12, “NTPC VIDYUT VYAPAR NIGAM LIMITED (hereinafter referred to as “NVVN”), a wholly Owned Subsidiary of NTPC Limited (Govt of India Enterprises) has been nominated as a Nodal Agency to facilitate the supply of 4,000 MW power from Gas Based Power (GBP) plants during identified crunch period (10th April 23 to 16th May 23).”

“This would ensure sufficient supply in the DAY AHEAD MARKET, which in turn is expected to have moderating effect on clearing price,” said the document. NVVN will select suitable bidders, followed by a reverse auction and bucket filing for issuing the Letter of Award (LoA) through an open competitive bidding process in accordance with the procedure set out herein.

Tariff & power exchange charges

The tariff payable will be on Rs/kWh basis with two components — one called Variable charges linked to gas price (VCG) and another called Variable Charge not linked to gas price (VCNG).

VCNG shall be quoted by the seller in Rupees/kWh in the financial bid and shall take into account all losses (if any) and all other relevant charges including fuel transportation costs, taxes including VAT, fixed cost, transmission charges, Power Exchange (PX) Charges etc. It will not be changed during the period of the contract.

On the other hand, for VCGA, the seller shall be entitled to receive variable charges towards energy scheduled in the Power Exchange through NVVN at the rate of Rs 8.80/kWh which shall be linked to the price of gas in INR/MMBTU and USD exchange rate.

All the charges deducted by power exchanges for the sale of the contracted capacity by NVVN shall be payable to NVVN by the seller. NVVN shall deduct the same from the daily payment to the seller towards the sale of power.

Supply of gas-based power

The supply of power from the selected plants to the Day-Ahead Market shall commence not less than seven days from the date of issue of the Letter of Award (LoA). To give effect to such supply, the selected gas-based power plant shall offer the capacity to the nodal agency, which in turn shall offer it on any of the power exchanges, which have successfully operated the Day-Ahead Market consecutively for the last 30 days for each time block.

The gas-based power plant connected to the inter-state or intra-state transmission system participating in the bid shall have all necessary infrastructure in place and capability for scheduling, metering, accounting and the settlement on a 15-minute time-block-wise basis as specified in the Indian Electricity Grid Code (IEGC) for the sale of power in the Day-Ahead Market in the power exchange. The power shall be sold and delivered by the seller to NVVN at the delivery point as applicable.

Power demand

The plan to schedule power from gas-based power plants is part of the Ministry of Power’s multi-pronged strategy to deal with power demand which is expected to rise by around 6-7 percent in FY24 (year-on-year). As part of this strategy, the ministry is planning to use gas-based power to meet any peak demand. In addition, NTPC will also run its 5,000 MW gas-based power stations during April-May 2023. Around 4,000 MW of additional gas-based power capacity is to be added by other entities. Gas supplies for power generation have been assured by GAIL. By March-end, the ministry has plans to offer an additional coal-based capacity of 2,920 MW. Power plants have been asked to undertake maintenance of coal-based and gas-based plants in advance to avoid disruptions during summer when power demand is going to peak. The government has also asked all imported coal-based plants to run at full capacity from March 16.

The Central Electricity Authority (CEA) expects India’s energy demand to be at 142 billion units (BU) in April 2023, which is likely to be the highest for 2023, before tapering to 141.20 BU in May and 117 BU in November. The country’s peak power demand is expected at 229 GW in April.

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