Hydro power projects are facing typical issues of Time and Cost overrun leading to cascading increase in overall capital cost and resultant tariffs. The client is in the process of acquisition of Hydro generating stations in India and desired to have a strategic roadmap to evaluate potential states for the sale of power.

As part of the engagement, Mercados analyzed the prospective off-takers in several states across the country in terms of Demand-supply gaps (existing and ensuing years), HPO, current hydro purchase quantum, procurement behavior of the discom(s) and average power purchase cost. The most critical element was to identify the peaking power requirement on a time-of-day basis and mapping the same against the overlap of potential hydro generation.

Mercados also worked out the long-term System Marginal Prices that can be considered as a benchmark price for considering alternative strategy for sale of power on exchange. Besides, evaluation was done for the potential for future power sales to neighboring countries like Myanmar and Bangladesh taking into account the transmission capacity, tariffs, and all applicable charges to supply power to such geographies. The insights helped Client to gauge possibility of sale of such power and supported in strategic decision making for cost to be paid for project buy out.