The Power Ministry has issued guidelines for a tariff-based competitive bidding process for acquiring power from grid-connected renewable energy projects. According to the new guidelines, bids will be designed in the form of a package with a minimum size of 50 MW. Furthermore, if the agreements with the land and infrastructure owning agencies are not renewed, the RE Power Generators are free to operate their plants after the PPA period expires. The PPA period has been specified as being at least 25 years from the scheduled commissioning date.
The ministry stated in its Gazette notification that the minimum size of a package should be 50MW in order to achieve economies of scale. The bidder must provide a quote for the entire package.
“The Procurer may also choose to specify the maximum capacity that can be allotted to a single bidder including its Affiliates, taking into account factors such as economies of scale, land availability, expected competition, and market development,” the bid package notification stated.
According to the guidelines, the procurer may invite bids in either (a) power capacity (MW) or (b) energy quantity (kWh or million units, i.e. MU) terms.
When procuring electricity, the ministry announced that ‘Tariff as Bidding Parameter’ would be used. According to the ministry, the procurer may choose between the following tariff-based bidding methods: (a) fixed tariff in rupees per kWh for the duration of the PPA; or (b) escalating tariff in rupees per kWh with a pre-defined quantum of annual escalations fixed in rupees per kWh and the number of years from which such fixed escalation will be provided.