https://ksandk.

com/newsletter/guidelines-for-tariff-based-competitive-bidding-process/

Different articles from different years of amendment.

Guidelines for Tariff-Based Competitive Bidding Process for Procurement of

Power from Grid-Connected Wind Solar Hybrid Projects" on (August 21, 2023)
Applicability and Definitions

The guidelines focus on the competitive procurement of long-term electricity from Hybrid Power
Projects. These projects require a proposal capacity of greater than 10 MW for intra-state
transmission and 50 MW for inter-state transmission, with a minimum of 33% of the capacity coming
from solar or wind. The guidelines allow for combined or independent solar/wind projects and
propose energy storage to stabilize output. They bind Procurers, Authorised Representatives, and
Intermediary Procurers, thereby encouraging the fulfillment of Renewable Purchase Obligations.
Transitioning from previous guidelines, alignment with extant bid documents is described. The
definitions clarify the roles of all entities bound by the guidelines and also introduce the concept of
Hybrid Power Generators and the Scheduled Commencement of Supply Date (“SCSD”).

Bid Preparation, Project Readiness, and Bid Structure

The guidelines require the Procurer to create bid documents per the specified conditions, with
government approval required for any deviations. The RfS may establish additional project
milestones and reporting demands, transferring to the Hybrid Power Generator (HPG) the
responsibility for obtaining clearances and permits. Bids will be invited in units of Power Capacity
(MW), with a minimum and possibly maximum capacity for a bidder. Tariff in Rs./kWh is the main
parameter for bids, and allocation employs a Bucket-filling method with a predefined "Range" of the
Least Quoted Tariff Bidder’s lowest quoted tariff. A single purchaser could receive up to 50% of the
total capacity, and reverse auctions may be employed.

Power Purchase Agreements

The PPA period is typically 20 years from SCSD but can extend to 25 years, with developers
permitted to operate after the PPA expires. The PPA, will be issued along with the RfS and includes
provisions regarding power quantum, recompense for deviations in generation, and offtake
constraints. Mechanisms for payment security, Change in Law provisions, Force Majeure clauses,
and Generation Compensation for decreased offtake due to grid unavailability are outlined. The
Event of Default section outlines the consequences for delays in supply commencement, inability to
maintain minimum Capacity Utilisation Factor (CUF), and other instances of non-compliance, such as
termination and damages that equal 24 months or the remainder of the PPA term.

Bidding Process, Evaluation, and Timeline

The bidding procedure consists of a two-stage e-bidding procedure - a technical bid followed by a
financial bid, with the possibility of an e-reverse auction. The RfS is issued by the Procurer or
Intermediary Procurer and outlines the proposal requirements and evaluation criteria. Additionally,
developers with existing capacity are entitled to participate. The document clarifies evaluation
committees, proposal submission, eligibility requirements, and Earnest Money Deposit (EMD)
forfeiture.

Indicative Timeline for Bidding Process:

  Publication of the RfS document, agreement drafts, and PSA (if applicable)
 Bid clarification, conferences, the opening of online Data Room, and RfS revision,
 RfS Bid Submission (22 days)
 Evaluation of technical proposals (64 days)
 Evaluation of financial bids and e-Reverse Auction (99 days)
 Letter of Award (LoA) Issuance (110 days)
 Signing of PPA and PSA (if applicable) (140 days)

Contract Award, Shareholding, and Commencement of Supply

The PPA will be signed with the successful bidder, or a Special Purpose Vehicle (SPV) founded by the
successful bidder. A committee will evaluate proposals, ensuring compliance and transparency.
Following the bidding procedure, the successful bidder's name and price will be made public. The
SCSD may be extended if the Appropriate Commission fails to adopt tariffs within the specified
timeframe. Letters of undertaking and bank guarantees are required for EMD and Performance Bank
Guarantee. The successful bidder is required to maintain a minimum stake in the undertaking. There
are specified timelines for the start of supply, and delays can result in penalties or contract
termination based on the SCSD and capacity start-up.

Other Provisions

The Generator is responsible for acquiring Transmission Connectivity to the ISTS network under the
GNA regulations, at their own expense. Metering Points for measuring energy will be located on the
low-voltage side of the CTU/STU substation. State Nodal Agencies will assist in the approval and
sanctioning of projects. Continuous monitoring and reporting of wind, solar, and electrical data will
be undertaken. Deviation from these Guidelines requires government authorization. Disputes
concerning tariff determination and other issues will be resolved by the CERC or through arbitration.
The Ministry of Power is authorized to clarify or alter the Guidelines. ISTS fees and losses are
compliant with existing regulations.

https://solarquarter.com/2021/08/02/mnre-amended-guidelines-for-tariff-based-competitive-
bidding-process-for-wind-solar-hybrid-power-procurement/

“Guidelines for tariff based competitive bidding process for procurement of

power from grid connected Wind Solar Hybrid Projects” issued by ministry on
(14.10.2020.)

Amendments:

The Amendments of the guidelines can be summarized as follows:

a. SECI will not be nodal agency anymore for implementation of guidelines and conduct e-bidding
process followed by e-reverse auction for eligible bidders.

b. SECI will remain intermediary procurer between DISCOM and Hybrid Power Generator (HPG).
The ‘intermediary procurer’ shall buy power from hybrid power generator (HPG) and sell the power
to one or more DISCOMs.
c. The intermediary procurer or end procurer of power i.e. DISCOM can be responsible for inviting
bid, project preparedness, the condition of bid documentation, site related project project
preparatory activities including clearances, tentative time table for bid process etc.

d. For any deviation in bid documentation with the issued guidelines need to be approved by
appropriate commissions i.e. CERC/ SERC/ JERC rather than MNRE itself

e. There will be two different power procurement scenarios as follows:

i. Scenario 1:

Direct procurment of hybrid power by DISCOM from HPG.

By this scheme DISCOM can avoid paying extra trading margin at INR 0.07/Kwh to SECI.

The Payment Security Clause need to be given to HPG by DISCOM as follows:

Revolving Letter Of Credit (LC) of an amount not less than one month’s average billing from the
project under construction and Payment Security Fund which shall be suitable to support payment
for at least three month’s billing of all the projects tied up with such fund.

In addition of the above two clauses, DISCOM may also choose to provide state government
guarantee, in a legally enforceable form, ensuring that there is adequate security to the HPG, both in
terms of payment of energy charges and termination compensation if any.

ii. Scenario 2:

Intermediary Procurer procures hybrid power from HPG and Sell to the DISCOMs.

a. The payment security need to be given to HPG by intermediary procurer is given below.

Revolving Letter Of Credit (LC) of an amount not less than one month’s average billing from the
project under construction and Payment Security Fund which shall be suitable to support payment
for at least three month’s billing of all the projects tied up with such fund. For the purpose of this
payment security fund, the intermediary may collect INR 5.0 Lac/MW from HPG. Such charges shall
be stipulated clearly in the RFS and shall go to the payment security fund set up for intermediary
procurement.

b. Payment security by DISCOM to intermediary procurer.

Revolving Letter Of Credit (LC) of an amount not less than one month’s average billing from the
project under construction. State Government guarantee, in a legally enforceable form, such that
there is adequate security, both in terms of payment of energy charges and termination
compensation if any.
F. In case of ‘Early Commissioning’ the generator will be allowed for partly or fully commissioning
before Schedule Commissioning Date (SCD), subject to availability of transmission connectivity and
approval of Long Term/ Medium Term/ Short Term transmission access agreement.

G. Delay in Commissioning on account of delay in LTA operationalisation :

For selling power from schedule commissioning date(SCD), HPG should have the signed Long term/
Medium term/Short term transmission agreement (LTA) from CTU/ STU.In case of delay in grant/
operationalisation of LTA by CTU/ STU and /or delay in readiness of the ISTS/ InSTS substation at the
delivery point, including readiness of power evacuation are the factors solely attributable to the
STU/CTU/transmission licensee and beyond of HPG control. In this case the delays of SCD will be
treated with time extension of SCD by competent authority.

https://energy.economictimes.indiatimes.com/news/renewable/mnre-amends-guidelines-for-tariff-based-
competitive-bidding-for-wind-solar-hybrid-projects/90146463

The ministry of new and renewable energy (MNRE) has amended the
guidelines for tariff-based competitive bidding process for procurement of
power from grid connected wind- solar hybrid projects in an office
memorandum dated( 9 March 2022)

Regarding the project commissioning schedule, it said that the projects should be commissioned by
the scheduled commissioning date which would be the date as on 24 months from the date of
execution of the power purchase agreement or power supply agreement, whichever is later.

"Delay in commissioning beyond the scheduled commissioning period should involve penalties on
the hybrid power generator," added the amended guidelines.