MNRE Amends Guidelines for Hybrid Projects

The Ministry of New and Renewable Energy (MNRE) has issued an office memorandum, modifying guidelines for the tariff based procurement from Wind and solar hybrid projects. These guidelines had originally been released on October 14, 2020, and amended subsequently on July 27, 2021. The purpose behind such hybrid projects is to seek RTC (Round the clock) supply of power from renewable sources.

The new changes cover the consequences of delay, in case of a departure from the Scheduled Commercial Date (SCD) of Operations on these projects, currently set at 24 months from the date of signing of PPA/PSA. Under the new guidelines, for delay in commissioning upto 6 months from the SCD, there will be encashment of performance bank guarantee on a per day basis and proportionate to the capacity not commissioned.

For a delay beyond 6 months, generator event of default as per clause 8.8.1 of the guidelines shall be considered to have occurred, and the contracted capacity shall stand reduced to the project capacity commissioned upto SCD + 6 months. With the PPA for the balance capacity being terminated.

The guidelines also add that commissioning/part commissioning of the project will be considered only after the generator demonstrates  possession of land.

The guidelines also add that it assumes that tariffs will be adopted by the relevant commission within 60 days of application. Where there is a delay in such tariff adoption, there shall be corresponding extension in the SCD.

The new guidelines have probably been necessitated by the delays in some of the Hybrid projects bid out, and the need to clarify the guidelines for regulators as well as other stakeholders to maintain consistency in treatment of such cases. Some developers have already highlighted that in these projects, either of solar or wind can take longer at times due to issues with land availability, or finding contiguous and appropriate land, especially as wind energy has much more stringent requirements for placement.