Understanding Round-the-Clock Tenders in India

Understanding Round-the-Clock Tenders in India

The Current Context and Ways Forward

Report by IEEFA and JMK Research

November 2021

India has been witnessing strong growth in renewable energy (RE) in terms of new power generation capacity addition in recent years. In August 2021, the nation surpassed the landmark of 100 gigawatts (GW) of installed renewable energy capacity. However, the penetration of RE in the overall electricity supply remains low. The main challenge of variable renewable energy (VRE), specifically solar and wind, is the intermittent and infirm nature of supply, reflected in its inability to meet variable electricity demand. Electricity distribution companies (discoms) demand a firm and uninterrupted supply of renewable power to ensure grid stability. RE complemented with power from conventional sources that have low plant load factors (PLFs) or energy storage systems (ESS) can provide firm power to utilities and consumers.

To support grid stability vis-à-vis RE integration, India has been focussing on physical aggregation of capacities from multiple generation and/or storage technologies. Combining VRE with stable complementary power from conventional sources such as thermal, hydro power and/or from ESS is necessary to ensure round-the-clock (RTC) power supply.

In October 2019, the Solar Energy Corporation of India (SECI) issued the first-ever RTC tender for 400MW (RTC-1). The following March, the SECI 5,000MW RE-plus-thermal (RTC-2) tender was announced (the capacity was reduced to 2,500MW in December 2020). In May 2020, the RTC-1 auction set the lowest bid (L1) tariff for the first year of the power purchase agreement (PPA) at Rs2.9/kWh (3% annual escalation for first 15 years).

To pave the way for deployment of RE power, complemented with power from conventional sources or storage, the Ministry of New and Renewable Energy (MNRE) issued guidelines for the tariff-based competitive bidding process for RTC power projects. For the RTC-2 auction conducted in October 2021, the L1 tariff was Rs3.01/kWh.

This report examines key tender conditions applicable to the RTC-1 and 2 tenders and briefly evaluates their impact on the relevant projects and stakeholders (discoms and developers), while also analysing the tenders’ alignment with the intrinsic demand-based approach of the RTC mode of power supply.

Following this, we describe prospective methodologies available to RTC power developers for setting up the relevant projects. We also discuss international projects focussed on “firming-up” RE-integrated power.

Table of Contents

Executive Summary       

  1. Introduction
  2. Analysis of RTC 1 & 2 Tenders



  1. Prospective Methodologies for RTC Project Deployment
  2. Global Experience
  3. Conclusion

About the Authors

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