MNRE’s New Guidelines Shed Light on Bidding Process for Wind-Solar Hybrid Projects
The guidelines allow storage component to be added to hybrid projects to curtail variability of power
The Ministry of New and Renewable Energy (MNRE) has issued its draft guidelines for the tariff-based competitive bidding process for the procurement of power from grid-connected wind-solar hybrid projects.
The guidelines aim to provide a framework for a bidding process for the procurement of hybrid wind-solar projects.
Stakeholders can submit their comments and suggestions to the draft guidelines by October 31, 2019.
The guidelines have been issued for hybrid projects of at least 5 MW at one site with the minimum bid capacity of 25 MW for intra-state projects; and individual size of at least 50 MW at one site with the minimum bid capacity of 50 MW for inter-state projects.
The guidelines allow the storage component to be added to hybrid projects to curtail variability of power. Bidders would be selected on the basis of the lowest quoted tariff bids (per kWh) for power purchase agreements (PPA) of a minimum period of 25 years. Like solar and wind projects, hybrid renewable projects will also be awarded on the basis of an e-reverse auction.
The developers of these hybrid projects will also be expected to declare the annual capacity utilization factor (CUF) at the time of signing of the PPA and will be allowed to revise it once within the first three years of the commercial operation date. Calculation of CUF will be on a yearly basis from April 1 of the year to March 31 of the next year. The declared annual CUF, according to the guidelines, will in no case be less than 30%. In case the developers fail to meet the CUF requirements, they will be liable to pay penalties.
Procurers looking to buy electricity from hybrid projects would be mandated to provide for adequate payment security measures in order 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.
According to the guidelines, the financial closure timelines for wind-solar hybrid projects would be seven months from the date of signing of the PPAs. Furthermore, the successful bidders would be given 18 months to commission projects from the same date.
The guidelines also give the method and timelines of the tendering process for hybrid projects. They also contain clauses for change in law, generation compensation in case of backdown of projects, and events of generator or procurer default.
Many energy experts believe that wind-solar hybrid projects are the solution to the problem of intermittency of renewable power. In May 2018, Mercom reported on the news of MNRE announcing wind-solar hybrid policy which aimed at providing a framework for the expansion of grid-connected wind-solar photovoltaic hybrid systems in the country. The government also announced a scheme to develop 2,500 MW of wind-solar hybrid project in the same month.
In August 2018, MNRE broadened the definition of ‘Storage’ in its hybrid policy. This was done by the removal of the word ‘battery’ from the relevant clauses in the policy.
Moreover, the Andhra Pradesh government recently issued Wind-Solar Hybrid Power Policy-2018 to encourage energy generation from wind and solar hybrid projects in the state.
Shaurya is a staff reporter at MercomIndia.com with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.