The Ministry of Power has introduced amendments to the guidelines for tariff-based competitive bidding for power procurement from grid-connected wind-solar hybrid projects. These modifications aim to enhance transparency, streamline project implementation, and encourage participation in renewable energy development.
One of the key changes allows procurers to specify substations in the interstate and intrastate transmission systems where developers must connect their projects. This adjustment ensures better grid integration and optimal power evacuation. Additionally, new provisions define how changes in law affecting projects will be handled, aligning with the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021.
Developers are now required to maintain a minimum Capacity Utilization Factor (CUF) as per their Power Purchase Agreement (PPA). If a developer fails to meet this requirement for two consecutive years, excluding the first contract year, it will be considered a default. This could lead to financial penalties equivalent to 24 months of tariff payments or the remaining PPA period. If the developer is unable to pay, the PPA may be terminated, and further compensation will be required.
Technical standards have been revised to promote competition while ensuring that only capable developers participate. Procurers may specify technical criteria based on an assessment of potential developers, ensuring a fair bidding process. Developers must also install and maintain GPS-enabled Automatic Weather Stations (AWS) for accurate data collection, in compliance with standards set by the government. Furthermore, cybersecurity compliance has been made mandatory to protect energy infrastructure from cyber threats.
The amendments introduce a new timeline for signing PPAs and Power Supply Agreements (PSAs). These agreements must be signed within 30 days of the issuance of the Letter of Award (LoA), with an extension allowed up to 12 months. Failure to meet this deadline will result in the cancellation of the LoA.
To ensure timely implementation, distribution licensees or intermediary procurers must seek regulatory approval for discovered tariffs within 30 days of the competitive bidding process. This provision aims to prevent delays in tariff adoption and project execution.
Financial security mechanisms have also been strengthened. New provisions allow for the use of insurance surety bonds as alternatives to traditional bank guarantees for earnest money deposits and performance bank guarantees. These bonds must be paid unconditionally, ensuring a reliable financial security framework for projects.
If a developer defaults, performance bank guarantees can be encashed to recover damages or unpaid dues. Any recovered amounts will be deposited into a payment security fund maintained by the intermediary procurer. Performance bank guarantees will be returned within 45 days of the project’s commercial operation date or in proportion to partial commissioning.
The guidelines emphasize strict adherence to standardized bidding processes. Any deviation from these guidelines requires prior approval from the appropriate regulatory commission. If deviations were already approved before the amendments, fresh approval is not necessary.
These changes aim to improve the efficiency and financial stability of wind-solar hybrid projects, ensuring a robust framework for India’s renewable energy expansion. The amendments reflect the government’s commitment to achieving its clean energy goals by enhancing transparency, reducing risks, and promoting investment in the sector.
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