India's CEA wants to limit PPA for gas-based plants to 15-18 years

CEA's draft of the National Electricity Plan of 2012 suggested that the duration of a PPA should be brought down from the existing 25 years to 15-18 years.

The Central Electricity Authority has further suggested that since gas is normally allocated for a 5 year period, signing of power purchase agreement, therefore, also needs to be facilitated for 5 year period, and should be reviewed from time to time. This is in line with extension of the gas allocation period up to the economic life cycle of the plant, which is 15-18 years.

In addition to this, the draft plan also recommended a mandatory purchase of gas based power by distribution companies and priority for gas allocation to CCHP plants.

It also recommended standard Bidding Documents for gas-based power; that fuel availability and price risks need to be borne by the procurers; extension of zero customs duties & taxes and interest rate subsidy to gas based peaking power projects at par with the renewable energy projects or Ultra Mega Projects.

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