January 22, 2022

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Power regulator asks Delhi not to procure power from NTPC’s old plants

NTPC had claimed that BSES cannot object to procuring power under composite agreements from the Dadri-I plant citing old age while continuing to avail electricity from Singrauli and Rihand plants, which had completed 25 years even before Dadri-I.

Delhi Electricity Regulatory Commission (DERC) has asked the state government to deallocate allocate Delhi’s share of 206 megawatt (MW) power from NTPC’s gas-based generating stations, given that power from these units are very expensive. Deallocation would mean stopping the procurement of power from the units.

The gas-based stations in question are Anta, Dadri and the Auraiya power plants. These plants have either completed or are nearing the end of their 25 years of operations.

According to the letter dated December 17, reviewed by FE, the DERC has also stated that Delhi should continue procuring 98 MW power from NTPC’s Unchahar, Kahalgaon and Farakka power plants owing to their lower supply costs. These units have completed 25 years of operations as well.

In July 2021, BSES — the Reliance Infrastructure-led power distributing company (discom) in the national capital — wanted to relinquish the electricity supply contract from NTPC’s Dadri-I coal-based power plant as the plant had completed 25 years of operations. The Union power ministry had clarified that discoms have the freedom to choose the specific plants, crossing 25 years, from which they want to stop sourcing power. NTPC has moved the Supreme Court regarding the surrender of power from the Dadri-I coal-based power plant.

NTPC had claimed that BSES cannot object to procuring power under composite agreements from the Dadri-I plant citing old age while continuing to avail electricity from Singrauli and Rihand plants, which had completed 25 years even before Dadri-I.

Under contractual requirements, discoms have to continue paying the fixed cost to thermal power plants to recover the projects’ capital expenditure and cover debt obligations even when they do not procure electricity. According to a report by Forum of Regulators, discoms in 12 states in the country cumulatively pay a hefty `17,500 crore a year to generators for the power they don’t use.

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