NTPC, PowerGrid beat deadline for MoU scheme

NTPC has closed eals to supply 85,000MW to distribution utilities across the country.

Of this, deals for well over 20,000 MW were signed in just two months — November and December, according to the Hindu Business Line.

This ensures that the company is booked for well beyond 2017, by when the power major is targeting a capacity of 75,000 MW on the ground.

January is the 5 cut-off for a phase-out of the MoU route for bagging generation projects. Under the new tariff-based competitive bidding regime, the developer that offers the lowest average electricity prices gets to set up the project. The move, which is expected to drive down electricity tariffs or the cost per unit of power at the consumer level and make the award of projects more transparent, effectively disallows developers of both generation and transmission projects to enter into MoUs with the distribution utilities for selling electricity post January 5.


“The aggressive signing of pacts in the last two months means that NTPC should be secure till 2020, even if it does not bag a single project under the new competitive bidding format,” a Government official involved in the exercise said.


PowerGrid is also pushing to sign pacts with private developers before the January 5 deadline. The utility has also been working on signing transmission agreements for the two Ultra Mega Power Projects  that are slated to come up in Orissa and Chhattisgarh, even though both projects are still to get environmental clearances.

Earlier this year, PowerGrid had signed up long-term transmission pacts for nine proposed high-capacity transmission corridors for wheeling power from a set of private projects coming up in the eastern and southern States. The move, entailing investments of about US$13 billion, has ensured that PowerGrid's order book position is more than comfortable for the next several years.