PTC plans to invite solar development bids for MNRE

PTC India

Power Trading Company India (PTC) has proposed to invite bids from solar developers on behalf of the ministry of new and renewable energy (MNRE).

Just as National Thermal Power Corporation (NTPC) did recently, PTC could go for reverse bidding on tariffs.

Also, the bids would be dollar-denominated to save bidders from foreign exchange risks, thereby also enabling them to place bids for lower tariffs.

The move is aimed at providing clean energy for less than Rs4.50 per unit, Livemint has reported.

As with NTPC, PTC, too, will be providing purchase guarantees to solar developers. It will make the projects bankable and more stable, in turn, allowing them to offer tariffs approaching grid parity.

By 2022 India has proposed to reach a solar power project deployment target of 100 gigawatts and 60 gigawatts of wind power. Cumulatively the initiatives will take an estimated $200 billion to implement.

At present, clean energy projects in India are being hindered by the limited availability of long-term credit at low interest rates. And large scale projects continue to be the more viable option to reduce energy costs as they would bring installation costs per megawatt down from Rs6 crore per megawatt to Rs4.5 crore per megawatt.

The upcoming initiative of PTC is to be jointly financed by PTC India Financial Services and International Finance Corporation.

In recent times, the share of PTC in India’s power trading market has declined. The company is exposed to vagaries of merchant power market, including rise in competition, price swings and suppression of demand as it lacks the stability afforded by long-term power purchase agreements (PPAs).

Currently PTC trades only a quarter of its power volumes through long-term power purchase agreements which offer better margins, too.

The company is, therefore, planning to increase the share of its long term contracts to 50 percent by the end of 2017, Livemint reports.

Ajith Kumar S

[email protected]