The Ministry of Power has amended a key regulation, enabling power plants that supply electricity to neighbouring countries to sell their output back in India if they encounter difficulties in the foreign markets. This move comes in the wake of ongoing unrest in Bangladesh and is expected to benefit Adani Power, which is currently the sole “exclusive” electricity provider to India’s eastern neighbour.
The ministry has modified the guidelines for the “import/export (cross-border) of electricity, 2018”, revising the rules governing Indian power generation stations that export electricity exclusively to neighbouring countries.
“The Government of India may permit connection of such generating station to the Indian grid (inter-state or intra-state) to facilitate sale of power within India in case of sustained non-scheduling of full or part capacity or default notice issued by the generator for any default including delayed payment under the power purchase agreement (PPA),” stated the notice issued on Monday.
At present, Adani Power’s 800 Mw Godda power plant in Jharkhand sells electricity exclusively to Bangladesh under a PPA signed with the Bangladesh Power Development Board in 2017. The thermal power plant, which sources coal from the Adani group’s mines in Australia, began selling electricity to Bangladesh last year. According to sector experts, while there are other electricity exporters, none have a similar exclusive arrangement.
“The amendment is focused on electricity sellers with exclusive arrangements, which currently only Adani has. Other exporters either supply pooled electricity to Bangladesh or have power banking or trading agreements with Bhutan,” said a senior official.
Responding to an e-mail query, a spokesperson for Adani Power said: “The said amendment is merely an industry enabling universal provision allowing such generating stations to obtain connectivity to the Indian grid, and as such in no way imposes any financial or other obligation on the Government of of India to purchase the power from such generating station.”
The spokesperson further said: “By connecting such generating stations to the Indian grid, the overall availability of power in the grid will increase, which will help cater to the soaring electricity demand across the country. Increased supply will help in fostering energy security and reducing prices in the domestic energy market.”
State-owned NTPC Ltd also has an agreement to supply 500 Mw of power to Bangladesh, but this is pooled from various stations. The Damodar Valley Corporation (DVC) secured a contract to sell 300 Mw to Bangladesh in 2018 through short- and medium-term agreements but does not have an exclusive PPA, according to a source. A query sent to an NTPC spokesperson did not receive a response at the time of press.
Officials noted that Adani Power is currently selling 70 per cent of its electricity production to Bangladesh, with the remainder available for use in India. The Godda power plant had established a dedicated HVDC (high voltage direct current) power transmission line to Bangladesh to facilitate the power supply. The cost of electricity sold ranges from BDT 11-14.
“This power is costlier but can be used as peaking power. The idea is that since the plant is in India and financed by Indian lenders, the country should also benefit, and the plant should not risk being stranded due to crises in other nations,” a power sector consultant based in Delhi explained.
The consultant said that this decision was anticipated, as it will encourage future investments by Indian power companies in neighbouring countries. “We have hydropower units coming up in Nepal, and we are planning power plants in Bhutan. These projects will now have a safety net,” the consultant added.
Opportunity in disaster
> Power ministry amends guidelines for ‘import/export (cross border) of electricity, 2018
> Allows exclusive cross-border electricity suppliers to sell in India in case of issues faced in other nation
> Among power exporters are NTPC, DVC and Adani Power
> Only Adani Power has an exclusive power purchase agreement with Bangladesh
First Published: Aug 13 2024 | 11:17 PM IST
