MNRE has issued Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round The-Clock (RTC) Power from Grid Connected RE Power Projects, complemented with Power from Coal Based Thermal Power Projects under Section 63 of Electricity Act, 2003.

       The main highlights of the Guidelines are as under:

• They are applicable for long term procurement of electricity by the Procurers on RTC basis, from ISTS-connected Renewable (RE) Power Projects which will be complemented/balanced with power from coal based ISTS-connected Thermal Power Projects through competitive bidding.
• A thermal power generator cannot tie up with more than one bidder, for the same spare capacity. However, multiple spare capacities of the same thermal power plant can be tied up with different bidders in the same tender.
• Bundled power can be procured directly from a generator or from intermediary procurer/trader. Trading margin, of Rs. 0.07/kWh shall be payable by the End Procurer to the Intermediary Procurer.
• Generators shall supply despatchable RE Power complemented with Thermal Power, in RTC manner, keeping at least 85% annual availability and also at least 85% availability during the peak hours. Peak hours will be four hours out of 24 hours and clearly specified by the Procurer beforehand in the Bidding Documents.
• Generators can combine storage for ensuring that it achieves the required minimum annual availability of 85%. However, annually a minimum 51% of energy shall be offered from renewable energy sources. This 51% shall also include offer from the storage system, provided RE sources were used to store energy in the storage system.
• Bidder shall invite Composite Tariff based competitive bidding for selection of procurer and minimum quantum of power that can be offered by the bidder should be 250 MW.
• In order to allow optimization of operation of RE and Thermal Power Generating Systems, the Generator is allowed to supply power from the thermal power plant in excess of contracted capacity, to any third party or power exchange without requiring any No-Objection Certificate (NOC) from the Procurer. The Generator may also sell the power which was offered to procurer (within Contracted Capacity) but not scheduled by Procurer, to any third party or power exchange without requiring NOC from the Procurer on a day ahead basis.
• In case if availability of Generator plant is less than 85% or if power supplied from renewable sources is less than 51% of total supplied power. the Generator has to pay penalty as per these guidelines.
• As per these guidelines in case the plant is available to supply power but the offtake of power is not done by the Procurer, Generator shall be eligible for payment from the Procurer corresponding to the reduced offtake. For claiming compensation, the generator must sell their power in the power exchange as a price taker.
• Projects shall be commissioned and commence supply of power within 12 months from the date of execution of the PPA with size less than 500 MW, within 24 months from the date of execution of the PPA with size from 500 MW to 1000 MW and within 30 months from the date of execution of the PPA with size more than 1000 MW.

       Mahindra Susten’s Views:

• RTC bidding guidelines are a level up from pure Solar and Wind bidding and it’s a positive and timely move by the Ministry. India has seen hybrid tenders which may be able to partially address the intermittency. With RTC guidelines, it will be possible to offset the common notion of intermittency which has been a challenge to its full grid integration.
• The government may now hold renewable energy auctions only for round-the-clock and hybrid projects, a move seen reducing the problem of intermittent supply and making clean power more competitive against traditional thermal plants. This may prove to be a serious threat to the dominance of coal-based power generation in the country.
• A pertinent case for RTC based bidding for RE is a 400 MW RTC tender won by Renew, wherein developer is free to deploy wind, solar or hybrid capacity in conjunction with storage to supply power day and night to two utilities. The winning price was Rs. 2.90/kWh for the first year of the 15-year deals, rising by 3% annually. This may have encouraged and hastened the process of bundling RE with existing thermal plants to provide firmer RE.
• SECI has also conducted an auction in January for a 1200 MW solar-wind (hybrid) storage project with assured peak power. Developers were asked to provide six hours of stored power. For six hours a day, they would have to provide power even when their plants were not generating it. Rs. 4.4/kWh. Since, SECI is coming out of these kinds of bids again and again, we can expect with reasonable certainty that storage will make RTC power a genuine possibility.
• The companies will have to resort to creative financial and technical engineering to meet the RTC expectations and still earn a return. For example, when the power output is high, the company may sell the surplus to third parties, and when it is low, it may pay the penalties for lack of supply. The aforesaid guidelines will also help in optimum utilization of transmission assets.#MahindraSusten #MNRE #Tariffs #ThermalPower #Solar #Assets #RE #RenewableEnergy #Susten101