Power Purchase in India trending towards E-Auction: A comparative study

Abstract

E-Auction methodology was adopted in the auction of coal mines earmarked for power sector under the provisions of Coal Mines (Special Provisions) Act, 2015 and the rules framed in order to ensure that there is no further rise in power tariffs. This was stated by Shri. Piyush Goyal, Minister of State for Power, Coal & New and Renewable Energy. This new proposal aimed to bring tariffs down which can benefit the distribution companies as targeted by UDAY scheme. Under the e-auction, the centre awards the coal block to the company which quote the lowest charges for mining. Power producers are allowed to add those charges with price at which they will sell the power to distributor. This time the government has replaced the conventional tendering process for power purchase by a state power distributor with an e-bidding platform as an attempt to make the bidding much more efficient and transparent by bringing up power procurement contract details to the public domain. Three states like Kerala, Bihar and Andhra Pradesh have already sought out 1,000 megawatt (MW) of short-term power through the power trading portal, which was being opened by power minister Shri. Piyush Goyal in the presence of state power secretaries at New Delhi. The Discovery of Efficient Electricity Price (DEEP) e-bidding reverse auction portal for now will cover short-term power purchase of less than a year and in the next few months; it will also start offering the options for longer-term power purchase too.