The Ministry of Power (MoP) has announced amendments in the guidelines for tariff based competitive bidding process to procure round-the-clock (RTC) power from grid-connected renewable energy projects. These guidelines were initially launched in July 2020 under Section 63 of the Electricity Act of 2003. According to the current amendment, renewable energy producers can merge storage for achieving required minimum annual availability of 90 per cent and maintain at least 90 per cent monthly availability for at least eleven months out of the year. However, renewable energy must account for at least 51 per cent of annual energy consumption.
The power purchase agreement (PPA) period will be 25 years from the date of scheduled commissioning or the date of commissioning of total project capacity, whichever is later. The PPA may also be set for a higher period, such as 35 years. The generators are free to operate their projects after the expiry of the PPA period in case the arrangements with the land and infrastructure owning agencies, the relevant transmission utilities, and system operators provide.
The bidding process must be evaluated using weighted average levelised tariff per unit supply of RTC power. The quoted tariff must consist of four elements including a fixed renewable and non-renewable component, a variable component of non-renewable power escalable for fuel, and a variable component of non-renewable power escalable for transportation. During each year under the PPA term, fixed components of renewable and non-renewable power tariffs will be quoted. The levelised tariff must be concluded using Central Electricity Regulatory Commission’s escalation indices.
The end procurer needs to give payment security to the intermediary procurer with a revolving letter of credit of an amount not less than one month’s average billing for the projects under consideration. If the end procurer is not eligible to be covered under the state government guarantee, then the tender must contain provisions for payment of an additional risk premium of Rs 0.10 per kWh.
