Following the acquisition of Tilaiya Ultra Mega Power Project (UMPP) from Reliance Power, the Jharkhand government is now looking to re-tender the 4,000 MW power project.

Reliance Power has created a special purpose vehicle (SPV), Jharkhand Integrated Power, for development of Tilaiya UMPP. However, the future of the project remains uncertain due to lack of clarity on the new regulations for awarding such projects.

Also, the Central government has raised the commitment in renewable energy. Under Climate Change Policy, the government has announced that 40 percent of the country’s energy demand will come from non-fossil fuel sources.

The Jharkhand Urja Vikas Nigam (JUVNL) is awaiting for the new UMPP bidding rules to be cleared by the Centre.

Once the standard bidding document (SBD) for awarding a UMPP is finalised, JUVNL will re-tender Tilaiya UMPP.

Reliance Power sold off its SPV to JUVNL for Rs 1.12 billion. The government, after taking charge in 2014, set up a committee to redesign the bid model of UMPP. While the Cabinet nod is awaited for SBDs, no state has expressed desire to host a UMPP, due to lag in demand and cash-short power distribution companies.

Apart from this, the Finance Ministry in the Union Budget 2014-15 announced setting up of five UMPPs under a ‘plug and play’ model. However, with SBDs yet to receive the Cabinet approval, the execution is held up.

The new draft guidelines for UMPPs suggest ‘plug and play’ model for imported coal-based plants such as the government will facilitate land, environment clearances and evacuation. The company developing the power project will set up, arrange for  imported coal and sell power. To buyers from fluctuating coal prices, the draft bid document suggests blending domestic with imported coal. For this, the Central government will facilitate coal supply for a period of five years.