Spark of hope

Patna, July 6: Bihar is set to get 300MW of electricity per day from the open market from 2015. The power-starved Bihar State Electricity Board (BSEB) has received the lowest bid from Essar Power to sell 300MW to the board.

The board has floated tenders to purchase 1,050MW power from the open market to meet the state’s energy requirement.

Eight prominent power companies submitted their bids in response to the board’s issue of request for proposals to purchase 1,050MW of electricity from the open market through a competitive bidding.

“Essar Power’s bid was the lowest among all the bidders. It has offered to sell 300MW to the state at the rate of Rs 3.69 per unit according to the long-term agreement plan,” a senior BSEB official told The Telegraph.

On whether the board could receive the least price offer for just 300MW against its bid for purchasing 1,050MW from the open market, the official said: “The board has also received bids for the remaining 750MW but at a higher rate. All these proposals will be placed before the meeting of the electricity board scheduled this month, where it will be decided how much and at what tariff rate the electricity has to be purchased. But a power purchase agreement (PPA) will be signed with Essar Power for the sale of 300MW.”

“The second lowest bidder is JP Power, which offered to sell 100MW at Rs 3.88 per unit while the third bidder is National Energy Trading and Services Limited (Nets), which was earlier known as Lanco Power Limited, which offered to sell 250MW at Rs 3.99 per unit to the board,” a source said.

The remaining 400MW was available at more than Rs 4 per unit that the board cannot afford, sources added.

BSEB decided to purchase 1,050MW from the open market to meet the state’s energy requirement in a short span of time, as the commissioning of new power plants, including its own generation units and MoUs with National Thermal Power Corporation (NTPC) and others for generation, would take time because of their long gestation period.

Thus, the board floated tenders in January this year to invite request for proposals from prospective bidders to purchase 1,050MW of electricity from the open market on a long-term PPA for 25 years.

The eight companies that expressed their interest and submitted their bids include Reliance Power, Indiabulls Power Limited, PTC India Limited (formerly known as Power Trading Corporation India Limited), Essar Power Limited, JP Power Ventures Limited, GMR Power Corporation Private Limited, Lanco Power Limited and Shapoorji Pallonji & Co. Limited.

However, it would take four years to avail the electricity after the signing of the PPA.

Asked what would delay the availability of power by such a long time despite the urgent requirement, the official said: “Power generating companies have already signed PPAs from their respective customers for long term in advance. Thus, they do not have additional power to provide electricity instantly. So PPA can be signed only for new projects, which would take at least four to five years to be completed.”

The official explained that the signing of the deal is crucial for Bihar where the Nitish government is making all out efforts to pull the state out of a power crisis.

The board has also planned to purchase 1,500MW of power under case-I bidding in which the board would purchase power from the open market on a long-term agreement.

Under the case-I bidding, the board has, so far, signed PPAs with Essar Power Jharkhand Limited (EPJL) for a supply of 450MW of power from its 1,200MW coal-based Tori I power project at Latehar district in Jharkhand.

The PPA was signed between BSEB and EPJL on July 9, 2010 and it would start power supply to Bihar from July 2014 at Rs 3.057 per unit for the next 25 years.

Loan agreement

A loan agreement for Rs 2,898 crore was signed between the BSEB and Power Finance Corporation for the construction of two 250MW new thermal power plants at Barauni, board spokesman H.R. Pandey said.

The first unit of 250MW of Rs 3,666 crore thermal power project, being constructed as part of the expansion plan at Barauni, would be completed by April 2014 and another unit of the same capacity would be completed in July 2014.