MoP issues amendments to guidelines for tariff based competitive bidding process

The Ministry of Power (MoP) has released amendments to the guidelines for tariff-based competitive bidding process for procurement of round-the-clock (RTC) power from grid-connected renewable energy projects complemented with power from any other source of storage. The amendment provides that the bidding evaluation parameter will be the weighted average levelised tariff per unit supply of RTC power. The bidder will be selected on the basis of least quoted weighted average levelised tariff. As per the amendments, if the allocated quantum of power to the bidder is less than the total quantum of power to be contracted, the capacity allocation will be on the basis of bucket filling method, till the tendered capacity is fully exhausted, as against the previous system wherein the remaining qualifying bidders (except the L1 bidder) were asked to match the tariff of the L1 bidder.

In November 2021, the MoP issued a notification to give local suppliers in the power industry buying preference in an effort to strengthen the ‘Make in India’ programme. When procuring goods, services, or works with sufficient local competition, only ‘Class-I local suppliers’ will be permitted to bid, regardless of the purchase value. Except when a global tender is launched, only Class-I and Class-II local suppliers would be able to bid. Non-local suppliers, as well as Class-I and Class-II local suppliers, will be allowed to participate in the bidding process for global tenders.

In the same month, the MoP and the Ministry of New and Renewable Energy (MNRE) issued revised guidelines allowing thermal generation companies to set up renewable energy generation capacity either on their own or through developers through open bids, and supply it to consumers under existing power purchase agreements (PPAs). Also, in the same month, The MoP revised the terms of reference of National Committee on Transmission (NCT) to fast-track Inter State Transmission System (ISTS) planning and approval process.  This revision is expected to ease the development and integration of renewable energy projects into the power system. NCT is mandated to propose expansion of ISTS to the MoP for approval after assessing the trend of growth in demand and generation in various regions, constraints, if any, in the inter-state, inter-region transfer of power, which are likely to arise in the near term/ medium term.

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