State-run power producer NTPC has called tariff-based bids to buy 2,000 MW of renewable energy, which it plans to blend with the costly coal-based capacity and sell to distribution companies under their existing contracts.
This follows the government’s recent policy announcement that gives coal-fired power plants with regulated tariffs the flexibility to generate and blend electricity, a move aimed at curbing emissions.
NTPC expects to finalise the tenders by June, a senior company executive said. The company is targeting to achieve 30% renewable energy generation portfolio by 2030. At present, renewable energy contributes only 2% to NTPC’s generation portfolio.
“It is a win-win for everyone,” the executive said on condition of anonymity. “The distribution companies will not lose anything as they will continue to pay the same price as per the PPA contracts. In case we are able to procure renewable energy at low cost, we will pass on the benefits to distribution companies.”
He said the policy for flexibility in generation scheduling provides flexibility for substituting thermal power by renewable power against the given schedule. “This will help in growth of renewables and grid balancing.,” the executive said.
The renewable energy procured at competitive rates will primarily substitute NTPC’s generation from costly plants, including those that are far from mines, he said.
The Union power ministry on April 5 issued a policy allowing thermal power generation companies the flexibility to generate or supply renewable energy under their existing power purchase agreements (PPAs).
“This flexibility will provide the power generators an opportunity to optimally utilise generation from renewable energy sources and also help in reducing emissions. The distribution companies will also be able to meet their renewable purchase obligations,” a government official said.
NTPC recorded a 6% growth in electricity generation in the last financial year. “Electricity demand so far in April has been at 8.5%,” said the NTPC executive.