MNRE Revises Standard Bidding Guidelines for Solar, Wind, Hybrid and FDRE Projects

The Ministry of Renewable Energy has issued amendments to the guidelines for tariff-based competitive bidding processes for procurement of power from grid-connected wind projects, solar PV projects, wind solar hybrid projects and renewable energy power projects with energy storage systems. The objective of these Guidelines is to bring standardization & uniformity in processes so that there is fairness & transparency in procurement.

Key changes include the following:

• Location Specific Bids: Procurer may specify the sub-station(s)in Inter-State Transmission System (ISTS)/Intra-State Transmission System (InSTS) where the project will be connected.
• Failure to Maintain Minimum CUF: Generators failing to maintain energy supply corresponding to the minimum capacity utilization factor (CUF) as declared in the power purchase agreement (PPA) for 2 (two) consecutive years shall be in default. The yearly minimum CUF shall get reduced to average of actual CUF for the two default years, and the defaulting generator shall be liable to pay damages equal to 24 months or the balance of the PPA period, whichever is less, for the reduction in the yearly minimum CUF obligation. Failing to pay may lead to termination of PPA with the payment liability remaining as is.
• Change in Law: It shall refer to the occurrence of any event related to the project from seven days prior to the last date of Bid Submission. It shall be as per the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021.
• Technical Criteria: Procurer may choose to specify Technical Criteria. The developer shall install and maintain GPS enabled Automatic Weather Station (AWS) and ensure availability of data. Cyber security provisions should also be included.
• Period for signing PPA and PSA: It may be extended from the standard 30 days to 12 months from the issuance of LOA.
• Tariff: The distribution licensee or the Intermediary Procurer shall approach the Appropriate Commission for adoption of tariffs discovered within 30 days.
• New Instrument: Insurance Surety Bonds may be used for the establishment of Earnest Money deposit or Performance Bank Guarantee.
• PBG Encash/Return: Damages recovered by the Intermediary Procurer by encashing the PBG, upon the default of the generator under the PPA, shall be credited to the Payment Security Fund to be maintained by the Intermediary Procurer. PBG shall be returned to the generator within 45 days of the actual commencement of supply date of the project, and in case of part commencement of supply, PBG corresponding to such part capacity shall be released.
• Deviations: The procurer shall seek approval of the appropriate commission for deviations from these guidelines, if any. Approval shall be granted within 60 days in the case of wind, solar, or hybrid projects. Deviations already approved prior to this amendment do not require fresh approval. Detailed provisions added for clarity purposes not consistent with the guidelines shall not be regarded as deviations.

The technical, legal, and financial clarifications brought about by these provisions seek to accelerate power projects contributing to India’s ambitious renewable energy targets. Notably, the change pertaining to the reduction in the PPA period from 20 to 15 years proposed in the draft has not been adopted in the final amendments.