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Tuesday, 03 May 2016
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UMPP, a quick way to meet the power gap

Ultra Mega Power Projects (UMPPs) are launched to meet the growing electricity needs of our economy, achieve power at a low tariff, and to make swift capacity addition. These are very large sized projects, approximately 4,000 MW each, and will meet the power needs of a number of states / distribution companies located in these states. These projects are being developed on Build, Own and Operate (BOO) basis.




For facilitating the development of these projects, Power Finance Corporation (PFC) has been designated as the nodal agency. In order to enhance investor confidence, reduce risk perception and get good responses to competitive bidding, it is deemed necessary to create a project specific SPV and get it to tie up necessary inputs and clearances such as provision of project site, fuel through captive mining blocks, water and in-principle environment and forest clearances. PFC has to create the project-specific Special Purpose Vehicle (SPV), which in turn will perform the bidding process for the project.


Salient features of UMPPs


  • The Ultra Mega Power Projects will use Super Critical Technology with a view to achieving higher levels of fuel efficiency, which results in saving of fuel and lower green-house gas emissions
  • Flexibility in unit size subject to adoption of specified minimum Supercritical parameters
  • Integrated power project with dedicated captive coal blocks for pithead projects
  • Coastal projects to use imported coal


In view of the fact that promotion of competition is one of the key objectives of the Electricity Act, 2003, and of the legal provisions regarding procurement of electricity by distribution companies, identification of the project developer for these projects is being done on the basis of tariff-based competitive bidding.


For these projects, as per the provisions of the competitive bidding guidelines, a two-stage selection process has been adopted. The first stage of bidding involves Request for Qualification (RfQ) containing qualifying criteria for selection of bidders. The RfQ documents submitted by the bidders are evaluated to identify those bidders who will be eligible to participate in the second stage of the process. The second stage of the bidding process invites Request for Proposals (RfPs) from the bidders so qualified. After evaluation of the RfP documents, the successful bidder is identified on the basis of the lowest levellised tariff.


Project Developments


The Union Cabinet is likely to give the green signal soon to a standard bid document which will facilitate auctioning of four or five domestic coal-based UMPPs, each entailing an investment of Rs 30,000 crore, which will enable auctioning of the UMPP projects in the current fiscal. The projects include Banka in Bihar, and Tilaiya in Jharkhand. The Power Ministry is also in the process of finalising the standard bid document for imported coal-based UMPPs.


In the case of Tilaiya UMPP, all power procurers have signed the termination notice served by Reliance Power to end the contract for the project.


The Expert Appraisal Committee (thermal power) will consider a proposal of recommending green clearance to the 4,000 MW UMPP proposed to be set up near Kakwara village in Banka district of Bihar, on 5 May, 2016.


The Coal Ministry has given in-principal approval to reallocate three mines for the Bhedabahal UMPP in Odisha, on 17 February, 2016, namely Meenakshi, Meenakshi-B and dip side of Meenakshi coal blocks.


The Central government has given its nod to Reliance Power's Sasan UMPP to produce additional coal from its Moher and Moher Amlohri coal blocks attached to the project. The project has been allowed to mine coal upto 17.20 million tpa during 2015-16.

Quote of the week:

  Piyush Goyal
"We are in dialogue with several states where UMPPs have to be bid out

- Piyush Goyal, Minister of State (IC) for Power, Coal, New & Renewable Energy


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