The Ministry of Power in India has released guidelines for a tariff-based competitive bidding process aimed at procuring firm and dispatchable power from grid-connected renewable energy projects with energy storage systems. The objective is to ensure a steady and predictable supply of renewable power to distribution companies while addressing the intermittent nature of renewable energy and underutilization of the transmission system.
The guidelines focus on promoting competition, transparency, and standardized procurement to reduce power procurement costs, facilitate renewable capacity addition, and meet renewable purchase and storage power obligations. They also aim to provide reasonable returns to investors and establish a framework for long-term inter-state and intra-state sale-purchase of power.
Key points from the guidelines include the requirement for generators to supply firm and dispatchable renewable power as per the demand profile specified in the request for selection (RfS), with penalties for non-compliance. Energy storage systems are necessary to ensure availability and performance criteria. Bids will be invited in power capacity terms, with a minimum bid quantum of 50 MW.
The bidding process will involve a single-stage, two-part process, including a technical bid and financial bid evaluation. The timetable for the bid process has been outlined, starting from the issuance of the RfS document to the signing of the Power Purchase Agreement (PPA).
Qualification criteria have been specified to assess the capabilities of project developers, including technical and financial requirements. The successful bidder must maintain a majority shareholding in the special purpose vehicle or project company executing the PPA.
The PPA period is typically 20 years, extendable up to 25 years, and includes provisions for various aspects such as force majeure events, compensation for generation deviations, payment security, and termination.
In case of deviations from the guidelines, the approval of the Appropriate Commission is required. The Ministry of Power has the authority to provide clarifications and modifications to the guidelines, subject to the approval of the Ministry of New & Renewable Energy (MNRE).
The issuance of the bidding calendar for renewable energy projects highlights the government’s commitment to achieving its renewable energy targets.
View the Ministry document here: