MNRE Amends Solar Projects’ Bidding Guidelines & Shortens Commissioning Period

After the last amendment which took place in June 2018, the Ministry of New and Renewable Energy (MNRE) has come forward with a resolution with amendments to the Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Solar PV Power Projects.

These are the amendments as follows:

• In the bidding process, a minimum period of 22 (twenty two) days shall be allowed between the issuance of RfS documents and the last date of bid submission. The previous period was for 30 days.
• In normal circumstances, the bidding process is likely to be completed in a period of 110 (one hundred ten) days from an earlier 120 days.
• Solar Power Generator is now required to attain the financial closure in terms of the PPA, within 9 (nine) months from the date of execution of the Power Purchase Agreement(from 12 months earlier), for projects being set up in Solar park, and within 12 (twelve) months from the date of execution of the Power Purchase Agreement, for projects being set up outside Solar park.
• The projects are expected to be commissioned, within a period of 15 (fifteen) months from the date of execution of the PPA, for projects being set up in Solar park, and within a period of 18 (eighteen) months from the date of execution of the PPA, for projects being set up outside Solar park. The period was 21 Months earlier.
• An extension for the financial closure can be considered by the procurer, on the request of the solar power generator after payment of a penalty as specified in the PPA. This extension will not have any impact on the scheduled commissioning date (SCD). Any penalty paid will be returned to the solar power generator without any interest on achievement of successful commissioning within the SCD.

The revised Time table for Bid process is:

For more information, click here.

In our view, Government is trying to expedite the process of commissioning and tendering for the development of solar power projects. For the last couple of months, the solar sector was seen losing its sheen due to policy interventions, and many tenders did not see any action as a result of that. However, after having said that, market experts do feel that this may affect the quality and execution of long term power projects, which are required to serve the country, for no less than 20 years. We remain hopeful that the current amendments will not play spoilsport for the Indian Solar sector any further.