Learning from setbacks and delays in starting the proposed power projects in Uttar Pradesh, the state government is set to formulate an energy policy to attract more private players in the sector.
Deliberations are on to frame an overall policy to give incentives to the private sector power majors to invest in the state and provide cheaper power to consumers.
Recently, the lowest tariff-based bids of Reliance Power to set up two power plants with a capacity of 3,300 Mw in Bara and Karchhna in Allahabad district were rejected. The government said the tariffs were high.
The state is taking recourse to re-bidding for the third time and the terms and conditions are being finalised by the Energy Task Force (ETF).
“We have learnt from this episode and are in the process of finalising a new energy policy to give impetus to the role of the private sector in energy,” said DN Varg, principal secretary (energy).
The ETF is also studying the energy policies of other states which have successfully involved the private sector in ramping up power generation and procuring cheaper power for its consumers.
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“We feel that our policy is not attractive enough to attract more private sector players and does not incentivise them to sell provide at cheaper rates. This will be taken care of in the new policy,” he informed.
Meanwhile, the cabinet has approved the cancellation of the Reliance bid for the Allahabad power plants and re-appointed the earlier consultants, Feedback Ventures, for the re-bidding process.
“The new terms and condition for the re-bidding are being finalised and the process would be over shortly,” Uttar Pradesh Power Corporation Limited (UPPCL) Managing Director Avnish Awasthi said.
The state government had initially proposed to set up three and two units of 660 Mw each at Bara (1,980) and Karchhna (1,320) in Allahabad respectively based on Super Critical Technology.
The government may now allow the private bidders to set up one or two additional 660 Mw units at the two places and allow them to sell the power generated from them in the open market, so that they may provide the state power share at cheaper rates.
“This can be one of the incentives that we may provide to the new bidders, so that the financial viability of the proposed power projects is also maintained,” Garg explained.
“The whole process of bidding and award of the proposed power plants in Allahabad would be completed by October or the first week of November this year,” Awasthi claimed.
The total generating of all the power generating units in UP roughly add up to 5,500 Mw, while the peak hour demand hovers around 8,000 Mw. The shortfall of roughly 2,500 Mw is accounted for by rostering and scheduled/unscheduled power cuts in the residential and industrial enclaves.