MoP announces guidelines for competitive bidding of renewable energy with energy storage

The Ministry of Power (MoP) has issued guidelines for a tariff-based competitive bidding process to procure firm and dispatchable power from grid-connected renewable energy projects with energy storage devices. The aim of the guidelines is to ensure a consistent and predictable supply of renewable energy to distribution firms while addressing intermittent nature of renewable energy and transmission system under-utilisation.The recommendations emphasise the need for generators to produce firm and dispatchable renewable energy in accordance with the demand profile described in the request for selection with consequences for noncompliance. Energy storage systems are required to meet availability and performance requirements. Bids will be solicited in terms of power capacity, with a minimum bid quantum of 50 MW.

The guidelines emphasise the need of encouraging competition, transparency, and standardised procurement in order to minimise power procurement costs, allow renewable capacity increase, and meet renewable purchase and storage power responsibilities. They also intend to deliver appropriate returns to investors and to provide the groundwork for long-term inter-state and intra-state electricity sales and purchases. The bidding procedure will be a two-part, single-stage process that includes a technical bid and financial bid review.

Qualification standards, including technical and financial requirements, have been established to assess the competence of project developers. The successful bidder must retain a majority stake in the special purpose vehicle or project company that will carry out the power purchase agreement (PPA). The PPA period is ideally 20 years, but can be extended to 25 years.