Bidding guidelines for wind power projects have been changed
The changes to the bidding guidelines for wind power projects were made based on the experience of bidding and after consultation with stakeholders
July 25, 2019
With a view to put wind energy projects and their execution on the fast-track as India chases a Renewable Energy target of 500 GW by 2030, the government has amended the guidelines for tariff-based competitive bidding for procurement of power from wind power projects. According to an official statement, the changes were made based on the experience of bidding and after consultation with stakeholders.
Timeline for land acquisition
The timeline for land acquisition for wind power projects has been extended from seven months to scheduled commissioning date — 18 months. This will help wind power project developers in states where land acquisition takes longer time.
Window for CUF revised
The window for revision of declared Capacity Utilisation Factor (CUF) of wind power project has been increased to three years. The declared CUF is now allowed to revise once within three year of commercial operation date, which was earlier allowed within one year only.
Penalty on shortfall in energy
The penalty on shortfall in energy corresponding to the minimum CUF, has now been fixed at 50 percent of the PPA tariff for the shortfall in energy terms liable to be paid by the wind power generator to the procurer. Further, the penalty shall be passed on by the intermediary procurer to the end procurer after deducting the losses of intermediary procurer, the statement said.
In cases of early part commissioning, the procurer may purchase the generation, at full PPA tariff. Commissioning schedule of wind power project has been defined as 18 (eighteen) months from the date of execution of the PPA or PSA, whichever is later.
How is this going to help?
The amendments are intended not only to reduce the investment risks related to the land acquisition and CUF but also to provide incentives for early part commissioning of the project. The subjectivity in penalty provisions has been removed and the penalty rate has been fixed. The risk of wind power developers in case of delay in signing of PSA has been mitigated by starting timeline of execution of the project from the date of signing of PPA or PSA, whichever is later.