MoP Amends TBCB Rules, Reduces PBG to 3 Percent and Mandates Faster PSA Approvals for RE Projects

In a major step to streamline renewable energy procurement and ease developer obligations, the Ministry of Power (MoP) has notified amendments to the Guidelines for Tariff-Based Competitive Bidding (TBCB) for the procurement of power from grid-connected solar, wind, hybrid, and renewable-plus-storage projects.

The Ministry of Power, issued the amendments on June 25, 2025, seeking stakeholder feedback within 15 days, by July 9, 2025. The amendments apply to the competitive bidding process for power procurement from solar PV, wind, wind-solar hybrid, and firm & dispatchable renewable energy projects with energy storage systems, covering both direct and intermediary procurement models. This overhaul follows earlier notifications issued between June 2023 and February 2025.

A key change mandates that when a distribution licensee (Discom) is the ultimate power buyer through an intermediary procurer like SECI, the Discom must now approach the Appropriate Electricity Regulatory Commission within 30 days from the date of Power Sale Agreement (PSA) signing if prior approval was not already secured. This is aimed at preventing delays in PSA validations, which have historically slowed down project financial closures and execution.

Another significant reform addresses long-standing developer concerns around delays in tariff adoption and PSA approvals by regulators. The new rules specify that if the concerned State Electricity Regulatory Commission (SERC) or Central Electricity Regulatory Commission (CERC) fails to approve the PSA or adopt tariffs within 60 days of submission or 120 days from PSA signing (whichever is later), then the procurer must automatically grant an extension to the project’s Scheduled Commercial Operation Date (SCOD).

The extension period will be equivalent to the number of days delayed beyond the 120-day window. Furthermore, the rules clarify that if delays occur in both PSA approval and tariff adoption, the higher of the two delays will be considered for SCOD extension. This provision removes the uncertainty developers face due to regulatory bottlenecks.

To reduce financial strain on developers, the Performance Bank Guarantee (PBG) requirement has been reduced from 5 percent to 3 percent of the estimated project cost for the financial year in which the bids are invited. This applies across all RE technologies including solar, wind, hybrid, and storage-linked projects. Procurers retain the discretion to fix the PBG but cannot set it below 3 percent, ensuring consistency in financial obligations.

The amendments also introduce clarity in Clause 5.1 related to bid documentation. Procurers preparing bidding documents like Request for Selection (RfS), Power Purchase Agreements (PPA), and Power Sale Agreements (PSA) must adhere strictly to the guidelines. Any deviations from the guidelines or standard bidding documents will require prior approval from the Appropriate Commission. However, if the procurer includes detailed provisions that are consistent with the guidelines, such additions will not be treated as deviations.

The Ministry of Power circulated the notification to all relevant stakeholders.These reforms aim to accelerate India’s renewable energy deployment by ensuring financial predictability for developers and accountability for distribution companies in securing regulatory approvals on time.

The guidelines are expected to improve investor confidence in the renewable energy sector and contribute towards India’s ambitious target of achieving 500 GW of non-fossil fuel energy capacity by 2030.