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Ministry of Power Releases New Bidding Guidelines for Grid-Connected Solar Projects

These guidelines apply to all forthcoming solar projects, with or without energy storage, highlighting a significant inclusion as the earlier guidelines lacked provisions relevant to energy storage.

August 09, 2023. By EI News Network

The Ministry of Power has introduced key guidelines to propel the growth of solar PV power projects in India. These guidelines apply to all forthcoming solar projects, with or without energy storage, highlighting a significant inclusion as the earlier guidelines lacked provisions relevant to energy storage.

The Power Purchase Agreement (PPA) period has been updated to 20 years from the scheduled commissioning date, with a possibility of extension up to a tenure of 25 years under exceptional conditions beyond the producer’s control; this is a minimisation from the previous PPA period of 25 years.

With the procurement of the tender, bidders will be allocated the power capacity they avail only if their tariff bids fall within 2-5 percent of the lowest bidder’s tariff.

Moreover, a single bidder can be allocated a maximum of 50 percent of the total capacity specified in the Request for Selection (RfS), an allowance that did not exist in the earlier guidelines.

These guidelines have mark an indicative timetable for the bidding process, ascertaining completion within approximately 110 days, with the provision of extension of time for bidders in case of changes in the RfS document.

The guidelines refer power procurement by levying penalties of one and a half times the PPA tariff on generators for energy shortfalls below the minimum capacity utilization factor (CUF), and giving the procurer the first right of refusal to purchase excess generation if the energy available exceeds the maximum CUF.

The commencement of power supply for projects ranges according to their capacity, with projects up to 1,000 MW needing to begin within 24 months of signing the PPA, and projects above 1,000 MW requiring commencement within 30 months.

The guidelines call for a reduction in contracted capacity and termination of the PPA for the remaining contracted capacity for delays longer than six months from the scheduled commissioning date. The generator may also be prohibited from bidding for a predetermined amount of time.
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