The government is likely to launch a fresh round of auction of power purchase contracts while also allowing escalation and fixed charges to power companies in a bid to alleviate stress in the sector.
Ahead of polls and setting in of summer demand, the auctions will help stranded and underutilised power plants sign agreements with state distribution utilities for three years. There are 14,000-mw stranded and underutilised power units, of which close to 8,000-mw have coal supplies but no power purchase agreements.
These include plants of companies like Sembcorp Energy India, SKS IspatNSE -0.25 % & Power, Lanco Infratech and Meenakshi Energy.
Recent tenders by discoms seeking short-term power supply have received high bids as generators expect coal shortage Read More
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