NTPC, India’s largest power producer, has decided to sign fresh power purchase agreements (PPAs) with existing customers and bundle thermal power with solar power in 85:15 ratio. According to a directive issued by the power ministry, utilities will have to compulsorily abide by the arrangement and the ones that decline to take solar power will not be allocated any thermal power.
In such cases, NTPC will allocate that power to other utilities. A senior power sector official told ET that at least 9,200 mw of NTPC’s installed thermal power capacities are more than 25 years old and another 3,000-4,000 mw of installed capacities will turn 25 years old in the next threefour years. Power from these plants will be bundled with solar power produced from an existing installed capacity of 110 mw to begin with, the official said.
NTPC is in the process of adding 10,000 mw of solar power capacity in the near future and supply from these plants will be added to the bundled supply as and when the power becomes available, the official said. Under the new PPAs, the state-run power producer will charge the average price of thermal and solar power. It will sign new agreements for 25 years, with a provision to review them after a period of 15 years, depending on the condition of the coal-based power stations used for bundling with solar power.
“Capital expenditure incurred for modernising and renovating these old power plants during the extended period of the PPAs will continue to be considered as additional expenditure for the determination of tariff,” the official said. NTPC’s plan to bundle solar power with thermal will help state utilities meet their renewable power purchase obligations which stipulates that utilities will have to source a certain percentage of power it consumes from renewable sources.
The renewable purchase obligation, at present, varies between 3 per cent and 10 per cent in different states. In Bihar and Delhi it is 3 per cent, while it is 5 per cent in West Bengal and 10 per cent in Tamil Nadu and Himachal Pradesh.