MNRE Amends Bidding Guidelines for Procurement of Solar Power

MNRE has issued amendments to its guidelines for the bidding process for the procurement of power from grid-connected solar PV power projects.

The Ministry of New and Renewable Energy (MNRE) has issued amendments to its guidelines for the tariff-based competitive bidding process for the procurement of power from grid-connected solar PV power projects.

The said guidelines which were first introduced in August 2017, have since been amended three times. In June 2018, January 2019, and then again on July 2019. The latest amendments come just 3 months after the latest changes that were made in July.

As per the notification, the key clauses in which amendments have been made are:

• Regarding the matter of intermediary procurers “traders” and end procurers, the provision for traders to buy power from the solar power generators and selling the same to one or more distribution licensees is still permitted. However, if the power purchased by the traders now is from different projects, the trader may sell the solar power to end Procurer(s) at the weighted average of tariffs discovered and finalised for different bids over a period of (January 1 to June 30) or (July 1 to December 31) of any year.
• The documents/ lease agreements to establish possession/ right to use 100 percent of the required land in the name of the solar power generator for a period not less than the complete term of the PPA, must now be submitted on or before the Scheduled Commissioning Date (SCD). Earlier, a period of 12 months after commissioning was allowed.
• In the clause regarding payment security by Intermediary procurer to the solar power generators, the intermediary procurer must provide payment security to the generator through a Payment Security Fund, which shall be suitable to support payment of at least 3 months’ billing of all the Projects tied up with such fund. However, now for the purpose of this Payment Security Fund, the intermediary may collect Rs 5 Lacs/MW from the generator(s). And all such charges must now be stipulated clearly in the RFS and shall go to the Payment Security Fund set up for such intermediary procurer.
• For the commissioning schedule, a delay in commissioning up to 6 months from the SCD, will allow for the encashment of Performance Bank Guarantee (PBG) on a per-day basis and proportionate to the capacity not commissioned. And, for the delay in commissioning beyond six months from SCD, the generator event of default, as per clause 5.6.1 of these guidelines, the contracted capacity shall stand reduced to the project capacity commissioned up to SCD + 6 months. The PPA for the balance capacity not commissioned shall be terminated.

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