Govt Releases Norms for Tariff-Based Bidding Process for RE Power with Storage

The Ministry of Power recently released a set of guidelines for a tariff-based competitive bidding process for procuring firm and dispatchable power from grid-connected renewable energy power projects with energy storage systems.

The document defined renewable power as solar generating systems, wind energy generating systems, or a combination of both, with Energy Storage Systems (ESS). It also clarified that ESS charged using a source other than renewable energy would not qualify as RE power. 

The norms said that the tenders for such purposes must specify additional milestones for the project. These included details related to land acquisition, connectivity, and others, as well as regular reporting requirements by the generators. It said that the tender documents also need to specify penalties concerning non-compliance with such milestones and requirements. 

The new guidelines said that the PPAs signed between the generator and procurer must contain details of Force Majeure definitions where the assigned works could not carried out due to reasons not under the control of generators. The new norms said that the generator must inform the procurer about the occurrence of force majeure within 15 days of the start. It also put the onus on the procurer to respond to the claim within 15 days after receiving the intimation. 

The norms, however, allowed the generator to use green markets to fulfil its obligations. “The generator has to offer power such that 100% of the annual energy offered corresponds to RE Power. The generator can, however, source up to 5% RE power (on energy terms) on an annual basis from the green market sources/bi-lateral agreements towards meeting the supply conditions stipulated in the RfS,” it said. 

As per the new mandate, the tariff must be quoted at the delivery point, which shall be at the CTU interconnection point. The generator would bear all charges and losses till the delivery point.

Bidding

The new norms said that during the bidding, the issuer has to mention the minimum quantity of capacity in MW that could be bid. The norms also said that the minimum quantum of power the bidder could offer should be 50MW for economies of scale. It also said that a maximum of 50 percent of bid capacity could be allocated to a single bidder in a tender. 

The norms also allowed the formation of a consortium by the bidders while it asked the procurer to constitute a committee to evaluate the bids. It also asked the bidders to submit two different bids-a technical bid and a price bid. The ministry also claimed that to ensure competitiveness, the minimum number of qualified bidders should be at least two. 

The new norms also batted for a PPA generally for 20 years from the Scheduled Commencement-of-supply date (SCOD). However, it said it could be for a longer period of 25 years too. The norms also talk about penalties for generators. 

“In case of shortfall in the project availability as defined in the RfS, for reasons attributable to RE Power Generator, the generator shall be liable to pay to the procurer penalty for such shortfall in availability. The penalty for not meeting the stipulated availability shall be equal to one and a half times the tariff for the number of units not supplied. The penalty for non-performance shall be as specified in the RfS. The scheduling and its punching thereof at different Regional Load Despatch Centres (RLDCs) / State Load Despatch Centres (SLDCs) (including the injecting, intervening and buyer SLDCs/ RLDCs) shall be the responsibility of the generator only,” it said. 

The new norms also talk about the commencement of the supply schedule. It said that the supply should start 24 months from the date of execution of the PPA for project sizes up to 1000 MW, whereas for the six more than 1000 MW, the time allowed is 30 months. 

“If, for some reason, the SCSD period needs to be kept shorter or longer than that provided in these Guidelines, the procurer can do the same. It is presumed that in terms of Clause 11.5 of these Guidelines, the Appropriate Commission will adopt the tariff within 60 days of such submission or within 120 days from the date of the Power Sale Agreement (PSA), whichever is more. However, notwithstanding anything contained in these Guidelines, any delay in the adoption of tariff by the Appropriate Commission, beyond 60 days of submission or 120 days of PSA, whichever is more, shall entail a corresponding extension in SCSD,” the norms said.