No ceiling tariffs/ caps for wind and solar tenders

No ceiling tariffs/ caps for wind and solar tenders

Date of Issue- February 2020

Key Highlights

MNRE issued a directive to Solar Energy Corporation of India (SECI), NTPC and state government departments to remove upper ceiling tariff/ tariff cap on renewable energy project auctions

MNRE has directed Solar Energy Corporation of India (SECI), National Thermal Power Corporation (NTPC), state distribution companies (DISCOMs), and other implementing agencies that they will procure renewable energy (RE) power either through single renewable source or various combinations of renewable sources with or without storage as per their procurement policies.

Impact

It’s an important and positive announcement by MNRE for the RE developers that would fasten up the tender activity. Especially for wind tenders, this was a major bottleneck and due to lower ceiling tariffs most of wind power tenders have been undersubscribed in the past. In some of the tenders, ceiling tariffs prescribed by the renewable energy procurer (SECI/NTPC/ State Discoms) were not viable and due to low ceiling tariffs, there was minimal participation from the industry. This had led to re-issuance and postponement of tenders which further lead to delay in capacity allocations. With the removal of ceiling tariffs RE developers will not face this issue and can bid on the tariffs that are financially viable.

Policy documents

Notification pdf

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