The Power Ministry on Sunday has floated a tender to procure 4 gigawatts (GW) electricity from gas-based power (GBP) plants during the peak demand months of April and May.

A Request for Supply (RfS) was floated for the procurement of electricity by NTPC Vidyut Vyapar Nigam (NVVN), a subsidiary of state-run power generator NTPC.

“NVVN has been nominated as a nodal agency to facilitate supply of 4,000 megawatts (MW) power from GBP plants during the identified crunch period (April 10 to May 16, 2023). This would ensure sufficient supply in the Day Ahead Market (DAM), which in turn is expected to have a moderating effect on clearing price,” the RfS document said.

Day-Ahead-Market (DAM) on a power exchange is a physical electricity trading market for deliveries for any/some/all 15 minute time blocks in 24 hours of next day starting from midnight.

Selected bidders will be eligible for opening of price bids, followed by reverse auction and bucket filing for issuing Letter of Award (LOA) through an open competitive bidding process, it added.

The last date for submitting bids is March 25, and the bidders will be selected on the same day. The pricing bids for qualified bidders will be opened on March 27. The Letter of Award (LoA) will be issued on March 30 and the agreement between selected bidders and NVVN will be inked by April 6, 2023.

Multi-pronged strategy

This is part of the Power Ministry’s multi-pronged strategy to deal with the rising power demand, which is expected to increase by around 6-7 per cent y-o-y in FY24.

As part of the strategy, gas-based power would be used to meet any peak demand and NTPC will run its 5,000 MW gas-based power stations during April-May 2023. Besides, 4,000 MW of additional gas-based power capacity would be added by other entities. GAIL has assured the necessary supply of gas. By March end, the Ministry will offer additional coal-based capacity of 2,920 MW.

Power utilities have been directed to undertake maintenance for coal-based plants in advance to avoid disruptions during peak summer months. Besides, all imported coal-based plants will run at full capacity from March 16.

Power demand

The Central Electricity Authority (CEA) expects India’s energy demand at 142 billion units (BU) in April 2023, highest for 2023, before tapering to 141.20 BU in May and 117 BU in November. The country’s peak power demand is expected at 229 GW next month.