MNRE Amends Bidding Guidelines to Procure Power from Hybrid Projects

The Ministry of New and Renewable Energy (MNRE) has amended the guidelines for a tariff-based competitive bidding process for power procurement from grid-connected solar-wind hybrid projects.

The guideline has been amended to include ‘intermediary procurer’ as an alternative term for the procurer. The previous version read the term procurer as distribution licensee or their authorized representative.

In cases where the distribution licensee authorizes a separate agency to carry out the tendering or bidding process on its behalf, then the authorized agency will be responsible for fulfilling all the obligations imposed on the procurer during the bidding phase, per new guidelines.

The scheduled commissioning date (SCD) for the hybrid projects has been changed to 24 months from the date of execution of the PPA or PSA, whichever is later. Earlier, this period was 18 months. Delay in commissioning beyond the scheduled commissioning period will involve penalties on the hybrid power generator, as detailed below:

  1. For delay in commissioning up to six months from SCD, encashment of performance bank guarantee on per day basis and proportionate to the capacity not commissioned.
  2. For delay in commissioning beyond six months from SCD, generator event of default will be considered to have occurred, and the contracted capacity will stand reduced to the project capacity commissioned up to SCD + six months. The PPA for the balance capacity not commissioned will be terminated.
  3. Commissioning or part commissioning of the project will not be declared until the generator demonstrates possession of land, in addition to the other conditions as established by the procurer or intermediary procurer for part commissioning portion of land on which the part of the project is commissioned should be with a generator.
  4. The appropriate Commission will adopt the tariffs within 60 days of such submission. However, notwithstanding anything contained in these guidelines, any delay in the adoption of tariff by the appropriate Commission beyond 60 days will entail a corresponding extension in the scheduled commissioning date.

The extension of the project timeline for hybrid projects from 18 months to 24 months is seen by some industry stakeholders as a relief for hybrid project developers for whom wind turbine availability is a challenge and prices rise. Others look at the increase in the interest during construction (IDC) as the projects have six more months for commissioning.

The increase in IDC could impact the project costs, which might be added to the output tariff if not borne by the developers.

Unlike pure solar or wind projects, developers must find a location with optimal irradiation and wind currents in the same spot to set up hybrid projects. The extension in the project timeline could help developers get more time to find the optimal location for hybrid projects.

According to Mercom India’s Solar Project Tracker, there are a total of 483 MW of hybrid projects currently in operation in India, with 6,872 MW in the pipeline.

Last November, MNRE issued a detailed proposal for developing wind parks and wind-solar hybrid parks. According to the document, areas with a wind potential of more than 30% capacity utilization factor (CUF) will be considered. Each park’s capacity should be 500 MW or more; however, parks of lower capacity may also be developed depending on land and resource availability.