MNRE Issued Guidelines for Procurement of Round The Clock Power

MNRE has issued the guidelines for the procurement of Round The Clock power from renewable energy power projects, complemented with thermal power projects.

The Ministry of New and Renewable Energy (MNRE) has issued the guidelines for the tariff-based competitive bidding process for the procurement of Round The Clock power from grid-connected renewable energy power projects, complemented with power from coal-based thermal power projects.

The ministry stated that in order to facilitate grid-connected solar power, the first phase of National Solar Mission provided for a scheme of “bundling” wherein, the then relatively expensive solar power was to be bundled with cheaper thermal power from the unallocated quota of the Government of India (Ministry of Power), generated at NTPC coal-based stations.

However, it noted that with the intervention of Government of India, the risks associated with solar and wind power sector have been brought down by way of advance arrangement of land and evacuation through solar parks, green energy corridors, a secure and standardised Power Purchase Agreement (PPA) for 25 years with an elaborate mechanism for risk apportionment and compensations, payment security, etc. Such de-risking of renewable energy (RE) sector, coupled with the advancement of technologies and economies of scale, has resulted in bringing down the tariffs in the solar and wind power sector thereby aiding in rapid deployment of solar and wind capacity in the country.

But still, the intermittent and unpredictable nature of renewable energy and low capacity utilisation of the transmission system needs to be addressed. The problem will get pronounced with the addition of large scale renewable capacity. In order to manage the infirm nature of power, electricity distribution companies (Discoms) are procuring balancing power (thermal) to provide grid stability and to meet its requirements during hours /periods of nonavailability of renewable energy (RE).

Thus in the new market conditions, the developments in the renewable energy sector and the necessity to address the issues of intermittency, limited hours of supply and low capacity utilisation of transmission infrastructure presents the case for “bundling”, wherein coal-based thermal power is bundled with renewable energy, and provided round-the-clock to Discoms. In other words, thermal power can be utilised to balance renewable energy and provide RTC power to the Discoms thereby obviating the need for them to balance power.

In line with this, the ministry has now issued the guidelines to enable procurement of RTC power by Discoms from grid-connected RE power projects, complemented/ balanced with power from coal-based thermal power projects, through a tariff-based competitive bidding process.

The specific objectives of these Guidelines are :

(a) To provide RTC power to the Discoms from renewable energy sources complemented/balanced with coal-based thermal power;

(b) To facilitate renewable capacity addition and fulfilment of Renewable Purchase Obligation (RPO) requirement of Discoms;

(c) To provide a transparent, fair, standardised procurement framework based on open competitive bidding with appropriate risk-sharing between various stakeholders to enable procurement of power at competitive prices in consumer interest, improve the bankability of projects and ensure reasonable returns to the investors; and

(d) To provide for a framework for an Intermediary Procurer as an Aggregator/Trader for the inter-state/ intra-state, long-term, sale-purchase of power.

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