|Choudhury: New game plan
New Delhi, Sept. 8: State-owned NTPC, which plans to bid for domestic mega power projects, is changing its strategy to scout for overseas coal resources.
“We are looking at mines abroad, but we are also keen to acquire stakes in mines, which will ensure good quality coal supply for 20 years or so,” NTPC chairman Arup Roy Choudhury told The Telegraph.
The strategy tweak will have a significant impact on projects such as the one at Cheyyur in Tamil Nadu, which will be based on imported coal.
Power Finance Corporation (PFC), the nodal agency to implement the mega power projects, is expected to come out with requests for qualification for two plants — Bedabahal in Odisha and Cheyyur in Tamil Nadu — by the middle of this month.
NTPC has been evaluating the option to buy stakes in coal mines in Indonesia, Mozambique and Australia.
Choudhury said, “We would look at all the mega projects that will come up for bidding, including the import-based power plants and may even look at buying equity in mines abroad.”
He said the company had decided to set up a plant based on imported coal in Andhra Pradesh with a 25-year offtake agreement signed with the state government.
“(We will) be aggressive in our bids to the extent that they are feasible. We are hopeful of winning some of these projects,” he said.
The amended standard bidding documents (SDB) will allow NTPC to pass through a change in fuel cost, which in turn, will help it to decide on the bid price.
“The amended SDB will help us to clearly decide on the bidding prices. We have been in this business for 40 years and we believe we have bid at realistic prices. However, we did not win any mega project then. In the past, some players quoted unrealistic prices,” Choudhury said.
Companies such as Tata Power and Reliance Power, which had won imported coal-based projects in the previous rounds, found the going tough after Indonesia benchmarked its coal to international prices, increasing the project cost and making them unviable at the existing price.
The Central Electricity Regulatory Commission had to find a way to allow them to pass through the costs.
The new bidding norms enable the power producer to sell electricity if the distribution company (discom) is reluctant to pay a higher price for coal either imported or procured through e-auction. Moreover, discoms will have to pay for fixed charges if the power producer does not sell to other customers.
An empowered group of ministers, headed by defence minister A.K. Antony, had recently cleared a proposal to change the bidding norms to implement Case-II thermal power plants, including the two 4,000 megawatt plants.
In Case-I projects, developers can choose the location, fuel and technology to be used. In Case-II, the location and fuel are decided beforehand.