Chandigarh, Mar 15 (GCBusiness) All India Power Engineers Federation (AIPEF) demands that the power purchase agreement (PPA) signed on March 12 with Adani Power by Madhya Pradesh government should be cancelled as the power is already surplus in the state and power utilities are already paying thousand of crore as fixed charges without getting any power from private power generators.
The proposal for construction of 1320 Mw thermal plant by Adani was submitted in February and within one and half month not only the proposal has been accepted but power purchase agreement has also been signed. The undue haste in which the whole process has been completed shows ulterior motives . AIPEF demands an investigation in the whole mess.
VK Gupta Spokesperson AIPEF said that in Madhya Pradesh average power demand in the state is 9000 MW and maximum demand is 14500 MW whereas the state has already signed power purchase agreements worth 21000 MW. This precarious condition is forcing Discoms to pay more than 2000 crore as fixed charges to private power generators without getting any power. This extra burden is transferred to the consumers in shape of enhanced tariff by the regulator.
Discoms have signed nine power purchase agreements and out of these four power generators Torrent Power, BLA Power, Jaypee Bina Power and Essar Power STPS will not supply any power in view of lesser power demand and Discoms will be paying these generators only fixed charges without purchasing a single unit of power. Under such circumstances where is the need for additional power purchase agreement with Adani.
Apart from low plant load factor (PLF) of state sector thermal projects even private power generators are facing problem of low demand with PLF of Mahan being 33 pc, Seoni (52 pc), Bina (59.6 pc), Nigri (56.48 pc). Anuppur (62 pc) during period Apr 2019 to Jan 2020. With Adani project the problem of low PLF will become unmanageable.
Padamjit Singh Chief Patron AIPEF said that the Madhya Pradesh government has violated the Tariff Policy of India by awarding project and signing PPA without competitive Bidding. As per policy all future requirement of power should continue to be procured competitively by distribution licensees except in cases of expansion of existing projects.
According to recent press report Madhya Pradesh will have to pay ₨ 580 crore in 2021 without drawing a single unit of power. Problem of low demand and payment of capacity charges for surrendered capacity will cause MP Discoms to go bankrupt.
Madhya Pradesh government should also clarify whether the approval of state power Regulator was taken before signing PPA.