With an aim to give more freedom to states to use their allocated coal, the power ministry has finally framed new rules to get electricity supply from most efficient independent power producers (IPP) in lieu of dry fuel. The new rules will replace the earlier rigid practice of allocation of coal to individual state-owned plants.
According to the new rules finalized by the government, the energy generated under this arrangement will be treated as transfer of coal. It is provided that the landed cost of power from IPP generating station at the buyer's periphery should be lower than the variable cost of generation of the state generating station whose power is to be replaced by that of IPP. Further, the landed cost of power shall be inclusive of the transmission charges and losses.
Under this arrangement, the IPP will make its own assessment about the availability of transmission corridor for the quantum of power offered and the period of supply before submitting price bids during e-reverse bidding. Besides, the rules provide that any restriction imposed by regional/states load dispatch centres (RLDCs/SLDCs) on scheduling of power due to breakdown of transmission and grid constraints shall be treated as force majeure without any liability on either side. Also, during the force majeure, no coal transfer shall be made to the seller.