Power plants short of buyers to get CERC incentive

In order to provide succour to thermal power plants that do not find buyers, the Central Electricity Regulatory Commission (CERC) has proposed an incentive scheme based on plant availability.

Under the present scheme, coal-fired and gas-based units get incentives on the basis of actual generation or the plant load factor (PLF).

The plants declare their availability and capability annually, along with expected actual generation for the full-year period, to recover their fixed cost.

However, if a plant produces more power than declared, it gets an incentive of 25 paise per unit. If the production is less, the plant fails to recover its variable cost.

The new scheme is aimed at aiding the plants that are functional but don't find buyers due to less demand or high cost.

"It is essentially meant for gas-based plants, power from which does not get dispatched either due to non-availability of gas or because of the high cost of generation (in case of liquid fuel)," says a CERC official.

"The commission wants to link the incentive to availability and not the plant load factor. A generator can only ensure availability of the station whereas the generation schedule depends on demand," the official added.

The new scheme, subject to the approval of the commission after consultation, is proposed to be implemented by October this year. The commission has prepared a discussion paper on the revised scheme seeking comments from all stakeholders.