E-bidding replaces power purchase tendering process

The centre has replaced the conventional tendering process for power purchase by state power distributors with e-tendering, in an attempt to make the bidding process efficient and transparent.

The e-bidding platform will bring power procurement contract details in the public domain and make it more accountable, union minister for power Piyush Goyal said.

Speaking at the launch of Discovery of Efficient Electricity Price (DEEP) e-bidding and e-reverse auction portal' for procurement of short term power by discoms in New Delhi on Tuesday, Goyal said the e-bidding process will lead to overall reduction of cost of procurement, significantly benefiting consumers.

The e-bidding process is already on and three states - Kerala, Bihar and Andhra Pradesh - have already sought 1,000 megawatt (MW) of short-term power through the power trading portal, Goyal said.

The Discovery of Efficient Electricity Price (DEEP) e-bidding reverse auction portal for now will cover short-term power purchase of less than a year and in the next few months, start offering the option for longer-term power purchase too.

The idea is to use the portal for all forms of power purchase and trading, including for 15 years and more, reducing the role of humans in transactions and eliminating corruption.

In the bidding process, state electricity regulators endorse the price discovered through a competitive bidding.

At present, only 10 per cent of total power purchase by state distribution companies, or discoms, are short-term.

''This portal will ensure seamless flow of power from seller to buyer and will be a very strong weapon to curb illegal transactions. It will also help in price reduction through competition,'' Goyal said.

Migration to the online platform is mandatory for all states. Power purchase process will no longer be bilateral in nature, added Goyal.

Suzlon Group chairman Tulsi Tanti said that the facility will encourage power trading among states. ''If a state has surplus power, it could find a quick buyer for it through this platform,'' said Tanti.

A power ministry official, who did not want to be named, said the entire short-term power purchase process will take only 10 days to conclude, out of which six days are for obtaining digital signature of contracting parties.

The government has been increasingly adopting the e-auction method to improve efficiency in the power sector. Infrastructure-intensive industries, such as power distribution and natural gas distribution, where two players cannot serve customers in the same geography, are prone to inefficiencies.

Recently, the government adopted e-auctions for procurement of transformers and other equipment for two flagship schemes for village lighting and strengthening of urban transmission network.

Last year, the government e-auctioned 31 out of 214 coal blocks. The allocation, done without an auction during the previous UPA government, was cancelled by the Supreme Court in 2014.