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MoP Proposes Key Reforms in Renewable Energy Bidding Norms

The Ministry of Power (MoP) has proposed amendments to streamline the tariff-based competitive bidding guidelines for grid-connected renewable energy projects, including solar, wind, hybrid, and storage-linked sources. A key highlight is the mandatory timeline for regulatory approvals of power sale agreements (PSAs), ensuring distribution licensees obtain approval within 30 days of signing—preventing prolonged delays in execution.

Further, if approval or tariff adoption is not completed within 60 days of submission or 120 days from PSA signing, developers will receive an extension for the Scheduled Commissioning and Supply Date (SCSD), calculated based on the longer delay. This provision safeguards developers from penalties arising from regulatory inaction.

The amendments also propose reducing the performance bank guarantee (PBG) from 5% to 3% of the estimated project cost, easing financial stress on bidders. The new PBG norms will be specified in bid documents and aligned with Ministry of Finance standards for wind projects.

These reforms follow earlier updates in February, which included compensation mechanisms for underperformance and location-specific bidding provisions. The latest proposals aim to boost ease of doing business and enhance investor confidence in India’s renewable energy sector.