Thread by @DrTongia

Short thread on the real problems with power procurement in India, aka BIDDING DOESN'T SOLVE THE PROBLEM

New PPA after 5 years: Madhya Pradesh approves pact with Adani Power financialexpress.com/industry/new-p… via @FinancialXpress

India doesn't bid for power, it bids for power plants.

You may get the cheapest coal plant, but not the cheapest power. RTC (“round the clock”) bids indicate trends but are also misleading. India needs Time of Day WHOLESALE pricing to improve generation portfolio signaling.

Far more worrying is whether such a long term PPA is needed, given power purchase agreements (PPAs) by the state (MP) exceed visible needs. Problem is a legacy mindset, including financing (who funds without a PPA? – same for #RenewableEnergy). Fuel is also linked to PPAs.

Bids don’t do a good job in #coal power plants. #Solar in India is competitive (cut-throat). Coal isn’t, but no one seems to care. Calculations based on industry (supplier) data suggest fixed costs should be HALF of the reported Rs. 2.90/kWh. (I don’t know the normative PLF here)

#Regulators, Policy-makers (see Electricity Act mandating “bidding”) just do not address the larger issues of power procurement and frameworks.

Once something is bid, it’s deemed “fair”; here we now have a fixed cost lock-in.

PPP (public-private partnership) isn’t the issue here (it might be a red herring). @ntpclimited also racks up many power plant wins (forget a decade ago it added ~40 GW under MoU route in a few months)

India’s real need is peaking power, in the coming years (er, ignore COVID). Peak power (esp. evening) means neither a new coal plant, nor variable RE. India needs to figure out how to end PPAs=lock-ins, first of all prospectively.

They don’t reduce risks – they transfer risks.

(n/n) If states want to add coal plants, they should build ones that are ultra-efficient, highly flexible operations, and at MUCH lower costs, AND SIMULTANEOUSLY also shut down older, dirtier ones.