Specify Wind Project Timelines & Penalties In Tenders: MoP Norms

Govt Amends Bidding Norms To Ease Early Starting Of Wind Projects

The Ministry of Power (MoP) notified its new guidelines for a tariff-based competitive bidding process for power procurement from grid-connected wind power projects. The motive was to bring uniformity in the bidding process and clarity to the power producers and procurers.

These norms apply to intra-state wind power projects with more than 10 MW of capacity or inter-state wind power projects with more than 50 MW of renewable energy capacity. The new norms said that the bid documents, like the Request for Selection (RfS), must mention the timelines of the wind power projects and associated delays. 

“The RfS may specify additional milestones for the project concerning land acquisition, connectivity etc. as well as regular reporting requirements by the Generator and shall specify penalties with respect to noncompliance with such milestones/requirements. Obtaining all clearances, permits, and licenses, including arrangement of land and connectivity to the Grid and access (if applicable) prior to the scheduled date of commencement of supply of power shall be the responsibility of the WPG, and the procurer shall not be responsible in case of delay in obtaining such clearances, permits, licenses etc,” the norms said. 

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The norms said that for the procurement of wind power, the tariff quoted by the bidder should be the bidding parameter. The ministry norms asked the procurers to specify the benchmark tariff and ask the bidders not to quote more than the benchmark. It also asked that the bidders bid for these tenders in Rs/kwh format for the PPA period. The ministry said that ideally, the longer PPAs should be signed for 20 years, but the procurer would be at liberty to extend it even up to 25 years. 

“The PPA period shall generally be for a period of 20 (twenty) years from the date of the SCSD or from the rescheduled date of commencement of supply to the extent of extension given by the procurer on the grounds which are beyond the control of the WPG. The PPA may, however, also be fixed for a longer period, such as 25 (twenty-five) years,” the norms read.

The new guidelines also said that the wind power generators (WPGs) would face a penalty if their Capacity Utilisation Factor (CUF) fell below the specified benchmark. As per the new mandate, the bidding document must indicate the CUF range and penalties in case of any deviation. It also allowed the WPG to sell its extra producer wind power to power exchanges or others in cases of increased CUF. 

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It also asked to specify the penalties in case of non-offtake of wind power from the generators due to grid unavailability or other reasons. It also asked to specify the payment in case of reduced offtake of the wind energy. It also asked the procurer to give eligibility-related criteria in the tenders for the bidders to apply based on their eligibility conditions.