India power cut hits millions, among worlds worst outages | Reuters

Holy smokes.  This flows from the requirement in recent tenders for power generation projects that independent power producers bid fixed or only moderately indexed price tariffs for capacity and for energy (the energy tariff component compensates the generator for fuel costs) and — and, amazingly, that bidders actually did bid on this, thinking they could just take coal at or perhaps below production cost from Indonesia as their press reports revealed.  Indonesia stopped that pronto with a minimum export price tied to regional coal market prices.  Duh!  Then the Indian government and state-owned enterprises in the power sector wouldn’t budge or retender the contracts.  Result:  No construction of projects due to broken economics and generation shortfalls.  Of course, this was all foreseeable, and due to bidders participating in a tender built upon a false premise – fixed prices.  You get what you deserve.  India power cut hits millions, among worlds worst outages | Reuters.

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