The Ministry of Power (MOP) has amended its tariff-based competitive bidding process guidelines for procuring power from wind, solar, wind-solar hybrid, and firm and dispatchable renewable energy projects with an energy storage system.

The Ministry had issued bidding guidelines for wind-solar hybrid projects, wind, and solar projects in 2023.

In four separate notifications amending the guidelines for solar, wind, wind-solar hybrid, and firm and dispatchable energy projects with energy storage, the Ministry said for location-specific bids, procurers must specify the substation in the interstate or intrastate transmission systems-connected renewable energy projects.

If a generator fails to meet the minimum capacity utilization factor (CUF) in the power purchase agreement (PPA) for two years, the yearly obligation will be reduced to the average of the actual CUF for those years.

Generators must pay the procurer lump sum damages equivalent to 24 months or a balance PPA period, whichever is less, for the yearly minimum CUF obligation reduction. Generators failing to pay lump sum damages will be considered defaulters, resulting in the PPA’s termination.

Change in Law

Provisions for change in the law must adhere to the Electricity Rules, 2021, and further amendments. The term “change in law” will refer to any project-related event that occurs within seven days before the final submission date.

PPAs and power sale agreements must be signed within 30 days of the letter of award (LoA). This period can be extended up to 12 months, beyond which the LoA will be canceled.

Distribution licensees must approach the appropriate authority for tariff adoption within 30 days of its discovery.

Insurance Surety Bonds

The Ministry has introduced a new instrument – insurance surety bonds – for meeting earnest money deposits and performance bank guarantees (PBGs).

Under these bonds, the PBGs can be encashed to recover any damages or dues from generators. The amount encashed from PBGs from defaulting generators will be credited to the payment security fund and must be maintained by the intermediary procurers.

Technical specifications

The Ministry has allowed procurers to specify technical criteria to encourage competition and ensure proper project implementation. Such criteria must be set after assessing the number of project developers expected to meet them to promote competition.

Developers must install and maintain GPS-enabled automatic weather stations per relevant central government agencies’ technical specifications and standards.

The technical criteria must include provisions to ensure the developers’ compliance with applicable cyber security regulations, directives, and guidelines issued by authorities dealing with cyber security.

Solar and energy storage systems procurers must promote commercially established and operational technologies to minimize the technology risk and to achieve the timely commencement of supply from the projects.

The appropriate electricity regulatory commission must approve any essential deviation by the procurers from the guidelines before commencing the bidding process.

The commission must approve or mandate modifications to the bid documents within 60 days.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.