Guidelines Released for Round-the-Clock Procurement of Renewables with Thermal Power

The Ministry of Power (MoP) has issued guidelines for the procurement of round-the-clock (RTC) power from grid-connected renewable projects complemented with power from thermal power projects.

According to the notification, the generator should supply renewable energy power complemented with thermal power in a round-the-clock manner, maintaining 85% availability during the peak hours. At least 51% of the annual energy offered should correspond to renewable power, and the balance should be offered from thermal sources. The generator can combine storage for maintaining the minimum annual availability of 85%. The bidders should quote a single composite tariff for renewable energy, complemented with thermal energy.

The minimum amount of power that can be offered is 250 MW. Since a bidder can tie-up with more than one thermal project for his renewable energy project, thermal capacities even much smaller than 250 MW can be utilized.

To ensure competitiveness, the minimum number of qualified bidders should be two. If the number of qualified bidders is less than two, even after three attempts of bidding and the procurer still wants to continue with the bidding process, it can be done with the consent of the appropriate commission.

The power purchase agreement (PPA) period should not be less than 25 years from the date of the scheduled commencement-of-supply date (SCSD). The PPA can also be fixed for a longer period, such as 35 years, but in any case, the duration of the PPA must be mentioned up front in the PPA document.

Per the notification, the summation of the generation schedule of renewable energy power and thermal power cannot be more than the contracted capacity in any time block. However, the total capacity of thermal power projects supplying power to complement the renewable energy power can be higher than the contracted capacity.

Further, the generator would also be liable for a penalty for any shortfall in offering renewable energy power below the mandatory 51% of the total power offered in a contract year. The penalty corresponding to this shortfall in renewable energy power would be calculated at 25% of the maximum indexed composite tariff payable during the year for each unit of the shortfall.

Total generation from the renewable energy sources should follow “must-run” and generation from thermal sources would follow the merit order of dispatch, based on its indexed variable charges.

For deviations from schedule, the deviation settlement mechanism (DSM) will be applicable as per the prevailing regulations.

The procurer should specify the financial criteria in the form of the net worth as a part of the qualification requirement. Considering that the generator is responsible for the supply of both renewable energy and thermal power, the net-worth requirement should be at least 30% of the estimated renewable energy project cost.

Timeline for Completion of Projects for Round-the-Clock Procurement of Renewables with Thermal Power

The notification further states that the renewable energy component under this program will be eligible for renewable purchase obligation (RPO) compliance. If renewable power has both solar and non-solar components, the distribution of RPO between solar and non-solar will be based on the principles adopted in the case of hybrid projects.

The interstate transmission system (ISTS) charges and losses on the transmission of power, including the waiver for renewable power, will be applied as per the existing regulations.

Recently, the Solar Energy Corporation of India Limited (SECI) once again extended the bid submission deadline for its tender to procure 5 GW of renewable power on an RTC basis complemented with thermal power projects. The date for the submission of bids has now been extended to August 4.

Earlier, the Ministry of New and Renewable Energy (MNRE) came up with a draft plan to supply RTC power from renewable (solar, wind, and hydro) projects, which will be complemented with power from thermal projects. The MNRE had asked for feedback from various stakeholders, including MoP, renewable energy associations, and state governments and their power distribution companies, among others.

In May, ReNew Power won the auction for SECI’s tender for 400 MW of renewable energy on a round-the-clock basis with a quoted tariff of ₹2.90 (~$0.038)/kWh.