Lok Sabha Question No. 3125 (UNSTARRED), answered on 2017-08-03
Subject: Power Purchase Agreement
Ministry: POWER
Asked by: RITA TARAI

## GOVERNMENT OF INDIA

## MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.3125 TO BE ANSWERED ON 03.08.2017

## POWER PURCHASE AGREEMENT

3125. SHRIMATI RITA TARAI:

Will the Minister of POWER be pleased to state:

- (a) whether  power  is  no  more  a  scarce  commodity  in  the  present scenario and is available on exchanges at an instantly agreed rate;
- (b) if so, the details thereof;
- (c) whether it has become virtually difficult and even unpredictable to know the power rate over  a longer  period  of  time  and  if  so,  the  details thereof;
- (d) whether  the  risk  borne  by  the  States  like  Odisha  entering  into  25 years PPA becomes too high to handle on account of volatility of power prices in the long run, if so, the details thereof; and
- (e) whether  his  Ministry  proposes  to  consider  necessary  modification for signing of the PPAs between the Generator and Beneficiary for a period of 5 years (not for 25 years) with provision for review after 5 years, if so, the details thereof and the time-frame for the same?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, COAL, NEW & RENEWABLE ENERGY AND MINES

( SHRI  PIYUSH GOYAL )

(a) & (b) : Yes, Madam, power is no more a scarce commodity. The peak and energy shortages have progressively reduced over the year and were at  1.6%  and  0.7%  respectively  in  the  year  2016-17.  Price  discovered  on exchanges  follows  principles  of  demand  and  supply.  The  price  and quantum of  electricity  to  be  transacted  is  determined  through  a  double sided closed auction bidding process on exchanges. The details of Power Supply position and  Peak Demand/Peak met of the states for the month of June, 2017 as per the Central Electricity Authority report is attached at Annexure-I.  The  rates  prevalent  on  the  Power  Exchanges  as  per  the Central Electricity Regulatory Commission (CERC) Market Monitoring Cell report are attached at Annexure-II.

..........2.

(c) : In the case of long term PPAs under cost plus approach, the tariff is governed by certain pre-specified factors in the Regulations of the Appropriate Commission, which is generally determined annually. In case of long term PPAs based on tariff based competitive bidding; the year to year  tariff  is  based  on  adjustments  based  on  pre-specified  indices  on escalable components. In case of short term contracts, the rate of power is  unpredictable only because the rate fluctuates significantly according to the demand and supply during the period.

(d) & (e) : State  Distribution  Companies  are  expected  to  manage  their power purchase portfolio to optimize power purchase cost and risks using various  power  purchase  agreement  (PPAs)  under  Long  Term  (upto  25 years), Medium term (more than 1 Year upto 5 years) and Short Term (upto 1  year)  for  which  adequate  provisions  already  exists  under  the  Model Bidding Documents notified under section 63 of the Electricity Act, 2003.

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) & (d) OF UNSTARRED QUESTION NO. 3125 TO BE ANSWERED IN THE LOK SABHA ON 03.08.2017.

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## Energy  Power Supply Position  Report  (Revised)

## Figures in MU net

( MU )

|                      | May,2017           | May,2017        | May,2017            | May,2017            | April,2017 to May,2017   | April,2017 to May,2017   | April,2017 to May,2017   | April,2017 to May,2017   |
|----------------------|--------------------|-----------------|---------------------|---------------------|--------------------------|--------------------------|--------------------------|--------------------------|
| State/System/ Region | Energy Requirement | Energy Supplied | Energy not Supplied | Energy not Supplied | Energy Requirement       | Energy Supplied          | Energy not Supplied      | Energy not Supplied      |
| Chandigarh           | 174                | 174             | 0                   | 0.0                 | 308                      | 308                      | 0                        | 0.0                      |
| System Delhi         | ( MU 3,375         | ( MU 3,373      | MU % ) 3            | 0.1                 | ( MU ) 5,985             | ( 5,981                  | ( MU 4                   | 0.1                      |
| Region Haryana       | ) 4,649            | ) 4,649         | 0                   | 0.0                 | 8,301                    | MU ) 8,301               | ( % ) 0                  | 0.0                      |
| Himachal Pradesh     | 803                | 799             | 4                   | 0.5                 | 1,572                    | 1,564                    | 8                        | 0.5                      |
| Jammu & Kashmir      | 1,597              | 1,274           | 323                 | 20.2                | 3,104                    | 2,478                    | 626                      | 20.2                     |
| Punjab               | 5,004              | 5,004           | 0                   | 0.0                 | 8,541                    | 8,541                    | 0                        | 0.0                      |
| Rajasthan            | 6,015              | 5,927           | 88                  | 1.5                 | 11,271                   | 11,172                   | 99                       | 0.9                      |
| Uttar Pradesh        | 11,055             | 10,935          | 120                 | 1.1                 | 20,819                   | 20,600                   | 219                      | 1.1                      |
| Uttarakhand          | 1,226              | 1,221           | 5                   | 0.4                 | 2,307                    | 2,301                    | 6                        | 0.3                      |
| Northern Region      | 33,900             | 33,357          | 542                 | 1.6                 | 62,207                   | 61,244                   | 963                      | 1.5                      |
| Chhattisgarh         | 2,271              | 2,271           | 0                   | 0.0                 | 4,782                    | 4,782                    | 0                        | 0.0                      |
| Gujarat              | 9,853              | 9,853           | 0                   | 0.0                 | 19,793                   | 19,793                   | 0                        | 0.0                      |
| Madhya Pradesh       | 5,544              | 5,544           | 0                   | 0.0                 | 10,876                   | 10,876                   | 0                        | 0.0                      |
| Maharashtra          | 14,145             | 14,112          | 33                  | 0.2                 | 28,300                   | 28,249                   | 51                       | 0.2                      |
| Daman & Diu          | 217                | 217             | 0                   | 0.0                 | 424                      | 424                      | 0                        | 0.0                      |
| Dadra & Nagar        | 518                | 518             | 0                   | 0.0                 | 1,024                    | 1,024                    | 0                        | 0.0                      |
| Goa                  | 356                | 356             | 0                   | 0.0                 | 724                      | 724                      | 0                        | 0.0                      |
| Western Region       | 32,905             | 32,872          | 33                  | 0.1                 | 65,923                   | 65,872                   | 51                       | 0.1                      |
| Andhra Pradesh       | 4,984              | 4,979           | 5                   | 0.1                 | 10,026                   | 10,019                   | 7                        | 0.1                      |
| Telangana            | 4,422              | 4,421           | 2                   | 0.0                 | 9,414                    | 9,410                    | 4                        | 0.0                      |
| Karnataka            | 5,455              | 5,453           | 2                   | 0.0                 | 11,684                   | 11,679                   | 5                        | 0.0                      |
| Kerala               | 2,232              | 2,228           | 3                   | 0.1                 | 4,505                    | 4,500                    | 5                        | 0.1                      |
| Tamil Nadu           | 9,599              | 9,596           | 3                   | 0.0                 | 19,043                   | 19,035                   | 8                        | 0.0                      |
| Puducherry           | 244                | 244             | 0                   | 0.1                 | 480                      | 480                      | 0                        | 0.0                      |
| Lakshadweep #        | 4                  | 4               | 0                   | 0                   | 8                        | 8                        | 0                        | 0                        |
| Southern Region      | 26,936             | 26,920          | 16                  | 0.1                 | 55,154                   | 55,123                   | 31                       | 0.1                      |

| Bihar             | 2,325   | 2,219   |   107 |   4.6 | 4,443   | 4,260   | 183   |   4.1 |
|-------------------|---------|---------|-------|-------|---------|---------|-------|-------|
| DVC               | 1,770   | 1,762   |     7 |   0.4 | 3,519   | 3,510   | 9     |   0.3 |
| Jharkhand         | 658     | 656     |     2 |   0.4 | 1,337   | 1,330   | 7     |   0.5 |
| Odisha            | 2,556   | 2,555   |     1 |   0   | 5,056   | 5,054   | 2     |   0   |
| West Bengal       | 4,827   | 4,799   |    28 |   0.6 | 9,533   | 9,477   | 56    |   0.6 |
| Sikkim            | 37      | 37      |     0 |   0   | 74      | 74      | 0     |   0   |
| Andaman- Nicobar  | 20      | 15      |     5 |  25   | 40      | 30      | 10    |  25   |
| Eastern Region    | 12,174  | 12,029  |   145 |   1.2 | 23,962  | 23,707  | 255   |   1.1 |
| Arunachal Pradesh | 64      | 63      |     1 |   1.9 | 126     | 124     | 2     |   1.6 |
| Assam             | 756     | 714     |    42 |   5.6 | 1,404   | 1,321   | 83    |   5.9 |
| Manipur           | 63      | 62      |     1 |   1.9 | 123     | 121     | 2     |   1.6 |
| Meghalaya         | 129     | 129     |     0 |   0   | 253     | 253     | 0     |   0   |
| Mizoram           | 44      | 43      |     1 |   2   | 86      | 85      | 1     |   1.2 |
| Nagaland          | 68      | 67      |     1 |   1.6 | 128     | 126     | 2     |   1.6 |
| Tripura           | 264     | 260     |     4 |   1.5 | 490     | 480     | 10    |   2   |
| North-Eastern     | 1,389   | 1,339   |    50 |   3.6 | 2,610   | 2,510   | 100   |   3.8 |
| Region All India  | 107,304 | 106,517 |   787 |   0.7 | 209,856 | 208,455 | 1,401 |   0.7 |

#  Lakshadweep and Andaman & Nicobar Islands are stand- alone systems,  power supply position of these, does  not form part of Regional requirement and availability .

## Peak Power Supply Position Report (Revised)

## Figures in MW net

| State                | May,2017    | May,2017   | May,2017       | May,2017       | April,2017 to May,2017   | April,2017 to May,2017   | April,2017 to May,2017   | April,2017 to May,2017   |
|----------------------|-------------|------------|----------------|----------------|--------------------------|--------------------------|--------------------------|--------------------------|
| System               | Peak Demand | Peak Met   | Demand not Met | Demand not Met | Peak Demand              | Peak Met                 | Demand not Met           | Demand not Met           |
| Region               | ( MW )      | (MW)       | (MW)           | ( % )          | ( MW)                    | (MW)                     | (MW)                     | ( % )                    |
| Chandigarh           | 340         | 340        | 0              | 0.0            | 340                      | 340                      | 0                        | 0.0                      |
| Delhi                | 6,021       | 6,021      | 0              | 0.0            | 6,021                    | 6,021                    | 0                        | 0.0                      |
| Haryana              | 7,780       | 7,780      | 0              | 0.0            | 7,780                    | 7,780                    | 0                        | 0.0                      |
| Himachal Pradesh     | 1,349       | 1,349      | 0              | 0.0            | 1,349                    | 1,349                    | 0                        | 0.0                      |
| Jammu & Kashmir      | 2,668       | 2,134      | 534            | 20.0           | 2,668                    | 2,134                    | 534                      | 20.0                     |
| Punjab               | 8,229       | 8,229      | 0              | 0.0            | 8,229                    | 8,229                    | 0                        | 0.0                      |
| Rajasthan            | 10,305      | 10,305     | 0              | 0.0            | 10,305                   | 10,305                   | 0                        | 0.0                      |
| Uttar Pradesh        | 18,646      | 17,819     | 827            | 4.4            | 18,646                   | 17,819                   | 827                      | 4.4                      |
| Uttarakhand          | 1,992       | 1,992      | 0              | 0.0            | 1,992                    | 1,992                    | 0                        | 0.0                      |
| Northern Region      | 52,517      | 51,820     | 697            | 1.3            | 52,517                   | 51,820                   | 697                      | 1.3                      |
| Chhattisgarh         | 3,737       | 3,713      | 24             | 0.6            | 3,888                    | 3,887                    | 1                        | 0.0                      |
| Gujarat              | 15,325      | 15,325     | 0              | 0.0            | 15,325                   | 15,325                   | 0                        | 0.0                      |
| Madhya Pradesh       | 8,227       | 8,227      | 0              | 0.0            | 8,402                    | 8,402                    | 0                        | 0.0                      |
| Maharashtra          | 21,874      | 21,778     | 96             | 0.4            | 22,542                   | 22,494                   | 48                       | 0.2                      |
| Daman & Diu          | 339         | 339        | 0              | 0.0            | 339                      | 339                      | 0                        | 0.0                      |
| Dadra & Nagar Haveli | 768         | 768        | 0              | 0.0            | 768                      | 768                      | 0                        | 0.0                      |
| Goa                  | 505         | 504        | 1              | 0.1            | 558                      | 557                      | 1                        | 0.2                      |
| Western Region       | 49,208      | 49,048     | 160            | 0.3            | 49,860                   | 49,788                   | 72                       | 0.1                      |
| Andhra Pradesh       | 7,914       | 7,882      | 32             | 0.4            | 7,914                    | 7,882                    | 32                       | 0.4                      |
| Telangana            | 7,412       | 7,396      | 16             | 0.2            | 9,009                    | 9,001                    | 8                        | 0.1                      |
| Karnataka            | 9,376       | 9,358      | 17             | 0.2            | 9,992                    | 9,987                    | 5                        | 0.1                      |
| Kerala               | 3,889       | 3,837      | 52             | 1.3            | 3,889                    | 3,862                    | 27                       | 0.7                      |
| Tamil Nadu           | 14,749      | 14,743     | 6              | 0.0            | 15,001                   | 14,975                   | 26                       | 0.2                      |
| Puducherry           | 379         | 379        | 0              | 0.0            | 388                      | 387                      | 0                        | 0.1                      |
| Lakshadweep#         | 8           | 8          | 0              | 0              | 8                        | 8                        | 0                        | 0                        |
| Southern Region      |             | 40,885     | 242            | 0.6            | 42,770                   | 42,535                   | 235                      | 0.5                      |
|                      | 41,127      |            |                |                |                          |                          |                          |                          |

| Bihar                | 4,122   | 4,021   | 101   |   2.5 | 4,122   | 4,021   | 101   |   2.5 |
|----------------------|---------|---------|-------|-------|---------|---------|-------|-------|
| DVC                  | 2,684   | 2,684   | 0     |   0   | 2,684   | 2,684   | 0     |   0   |
| Jharkhand            | 1,211   | 1,211   | 0     |   0   | 1,211   | 1,211   | 0     |   0   |
| Odisha               | 4,208   | 4,208   | 0     |   0   | 4,227   | 4,227   | 0     |   0   |
| West Bengal          | 7,515   | 7,495   | 20    |   0.3 | 7,820   | 7,793   | 27    |   0.3 |
| Sikkim               | 78      | 78      | 0     |   0   | 91      | 91      | 0     |   0   |
| Andaman- Nicobar     | 40      | 32      | 8     |  20   | 40      | 32      | 8     |  20   |
| Eastern Region       | 19,149  | 19,032  | 117   |   0.6 | 19,238  | 19,191  | 47    |   0.2 |
| Arunachal Pradesh    | 145     | 145     | 0     |   0.2 | 145     | 145     | 0     |   0.2 |
| Assam                | 1,649   | 1,580   | 69    |   4.2 | 1,649   | 1,580   | 69    |   4.2 |
| Manipur              | 163     | 161     | 2     |   1.2 | 163     | 161     | 2     |   1.2 |
| Meghalaya            | 304     | 304     | 0     |   0.1 | 304     | 304     | 0     |   0.1 |
| Mizoram              | 86      | 85      | 1     |   0.8 | 86      | 85      | 1     |   0.8 |
| Nagaland             | 132     | 131     | 1     |   0.4 | 132     | 131     | 1     |   0.4 |
| Tripura              | 280     | 276     | 4     |   1.4 | 280     | 276     | 4     |   1.4 |
| North-Eastern Region | 2,472   | 2,391   | 81    |   3.3 | 2,472   | 2,391   | 81    |   3.3 |
| All India            | 159,816 | 156,733 | 3,083 |   1.9 | 159,816 | 158,393 | 1,423 |   0.9 |

#Lakshadweep and Andaman & Nicobar Islands are stand-alone systems,  power supply position of these, does not form part of Regional requirement and availability

| Notified Power Cuts/Restrictions on Industries during June,2017                                                       |                                                                                                                        |
|-----------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
| State/ Region                                                                                                         | Energy/Demand Cut                                                                                                      |
| Northern Region Chandigarh* Delhi Haryana Himachal Pradesh Jammu& Kashmir* Punjab Rajasthan Uttar Pradesh Uttarakhand | No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts |
| Southern Region Andhra Pradesh Telangana Karnataka Kerala Tamil Nadu Puducherry Eastern Region                        | No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts No Notified Cuts                  |
| Bihar Jharkhand                                                                                                       | No Notified Cuts No Notified Cuts                                                                                      |
| Odisha West Bengal                                                                                                    | No Notified Cuts No Notified Cuts                                                                                      |
| * Data not received                                                                                                   |                                                                                                                        |
| .                                                                                                                     |                                                                                                                        |

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ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  &  (d)  OF  UNSTARRED QUESTION NO. 3125 TO BE ANSWERED IN THE LOK SABHA ON 03.08.2017. ***********

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Source: CERC Market Monitoring Cell report

CERC  notifies  the  Average  Power  Purchase  cost(APPC)  at  the National level by  computing the  average  of  APPC  of  all  States and  Union  Territories, weighted by volume of conventional power purchased by the respective State/UT. CERC order  dated  25.1.2016, for  'Determination  of  Average Power  Purchase  Cost  (APPC)  at the    national    level(Petition    No.    15/SM/2015)  prescribed  the National APPC as Rs 3.40/ kWh.

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