MNRE Revises Bidding Guidelines to Strengthen India’s Renewable Energy Sector
MNRE Revises Bidding Guidelines
Introduction
The Ministry of New and Renewable Energy (MNRE) has recently amended the Standard Bidding Guidelines (SBG) for Solar, Wind, Hybrid, and Firm and Dispatchable Renewable Energy (FDRE) projects. These amendments aim to enhance transparency, efficiency, and financial stability in India’s renewable energy sector.
Key Amendments:
1. Substation Specification for Bidders:
Procurers can now specify substations in the interstate and intrastate transmission systems where developers must connect their projects, ensuring better grid integration and optimal power evacuation.
2. Capacity Utilization Factor (CUF) Compliance:
Developers are required to maintain a minimum CUF as per their Power Purchase Agreement (PPA). Failure to meet this requirement for two consecutive years, excluding the first contract year, will be considered a default, potentially leading to financial penalties or PPA termination.
3. Change in Law Provisions:
The amendments define how changes in law affecting projects will be handled, aligning with the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021, thereby reducing uncertainties for developers.
4. Introduction of Insurance Surety Bonds:
A new instrument, insurance surety bonds, has been introduced to meet Earnest Money Deposit (EMD) and Performance Bank Guarantee (PBG) requirements, offering developers more flexibility in financial arrangements.
5. Timelines for PPA and PSA Execution:
PPAs and Power Sale Agreements (PSAs) must be signed within 30 days of the Letter of Award (LoA), extendable up to 12 months, beyond which the LoA will be canceled, ensuring timely project implementation.
These amendments reflect the government’s commitment to achieving its clean energy goals by enhancing transparency, reducing risks, and promoting investment in the sector.
For detailed information, refer to the official MNRE guidelines.
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This article is intended for informational purposes only and does not constitute legal advice. For specific legal concerns, consult with a qualified legal professional.