MNRE Guidelines for Procuring Power From 2.5 GW of Wind Projects Blended With Solar

The rated power capacity of the wind project should not be less than 80% of the total contracted capacity blended with 20% of solar power

June 29, 2020

/ Wind

The Ministry of New and Renewable Energy (MNRE) has issued guidelines for tariff-based competitive bidding process for procuring power from 2.5 GW of the interstate transmission system (ISTS) connected wind projects blended with solar power.

According to the document, the Solar Energy Corporation of India (SECI) will act as the nodal agency for the implementation of the program. The selection of projects under this program will be through a bidding process followed by an e-reverse auction. The wind and solar projects may be located at the same location or nearby, but the individual wind and solar components of the project will inject power into the grid at a single point. The tariff for the project will be determined by SECI through a transparent e-bidding process.

The main objective of the program is to provide a framework to procure electricity from 2.5 GW of wind power projects blended with solar power.

The total capacity to be awarded under the program is 2.5 GW, and the minimum capacity that a developer can bid for is 50 MW. Further, the rated power capacity of the wind project should not be less than 80% of the total contracted capacity blended with 20% of solar power.

According to the guidelines, the developers of these projects will be required to declare the annual capacity utilization factor (CUF) of the project at the time of bid submission. Calculation of CUF will be on a yearly basis,and the declared annual CUF should not be less than 30%. Other qualifications and eligibility criteria will be released by SECI, the nodal agency.

Procurers looking to buy electricity from these projects would be mandated to provide for adequate payment security measures to protect the interest of the generators. This would be done through a revolving letter of credit (LC), payment security fund, and state government guarantees.

Under the program, the developer of the blended wind power project will not be allowed to sell power to any other entity other than SECI. The power procured from the project can be used for the fulfillment of renewable purchase obligation (RPO) targets in the proportion of rated capacity of solar and wind power in the project.

Further, SECI will enter into a power purchase agreement (PPA) with the blended wind power generator, and it will also enter into a power sale agreement (PSA) with the distribution licensees or bulk consumers. If SECI fails to enter the agreement within six months from the issuance of the letter of award (LOA), the project would be deemed to be canceled.

The ministry has determined the period of PPA as 25 years from the scheduled commissioning date (SCD), and SECI will charge a trading margin of ₹0.07 (~$0.0009)/kWh from the procurer for the sale of blended power. There will be no central financial assistance (CFA) available for the development of projects under this program.

According to the guidelines, the generator should attain financial closure within 12 months from the date of execution of the PPA. The document further states that the projects should be commissioned within 24 months from the date of execution of the PPA or PSA, whichever is later. Delay in commissioning beyond the SCD will involve penalties on the generator.

To ensure the quality of wind turbines installed, the certified wind turbine models listed in the Revised List of Models and Manufactures (RLMM) brought out by the MNRE will be allowed for the deployment.

Further, in case of any curtailment apart from grid security, the generator will be eligible for a generation compensation, the guidelines say. The curtailment of renewable power is a huge concern for developers across states, and this has been addressed in the guidelines.

Earlier, MNRE had issued its draft guidelines for the tariff-based competitive bidding process for the procurement of power from grid-connected wind-solar hybrid projects.

Previously, Mercom had reported that MNRE had got the President’s approval for the proposed program to set up 2.5 GW of the ISTS-connected wind and solar hybrid projects across the country on build own operate basis.

In January 2020, Greenko Group and ReNew Power won the auction conducted SECI for 1.2 GW of solar, wind, and energy storage projects with guaranteed peak power supply.While Greenko has been awarded 900 MW, ReNew Power has won 300 MW of projects. Greenko Group won the bid at a peak power tariff rate of ₹6.12 (~$0.086)/ kWh, and ReNew Power won at ₹6.85 (~$0.096)/ kWh.

Image credit: Hero Future Energies