Punjab Commission clears deviations in tendering process for solar projects

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The Punjab State Electricity Regulatory Commission (PSERC) has authorized exemptions from the guidelines of the price-based competitive bidding process for grid-connected solar photovoltaic (PV) projects in two petitions separate files filed by the Punjab State Power Corporation (PSPCL).

According to the petitions filed, PSPCL wants to source electricity from 250MW of grid connected solar projects (located anywhere in India) and 250MW of grid connected solar projects of 10MW and above in Punjab.

PSPCL intends to purchase electricity from both projects through a bidding process followed by electronic reverse auctions.

250 MW of grid-connected solar projects (located anywhere in India)

PSPCL had proposed deleting the provision which reads: “If the project site is located in the same state as the purchaser, the state government will provide the necessary support to facilitate connectivity from the plant to the plant. State Transportation Company (STU) / Central Transmission Service Substation (CTU). The Commission observed that PSPCL, being an independent commercial organization, cannot impose any obligations on the state government. As such, the Commission has authorized the said derogation.

PSPCL had proposed a ceiling tariff of 2.50 (~ $ 0.034) / kWh in the tender dossier which would be followed by a reverse electronic auction. The Board observed that since it complies with the CERC Renewable Energy Tariff Regulations, the purchaser can specify the ceiling tariff after adequate due diligence. The Board would examine the competitiveness of the final tariff discovered when the tariff was adopted. In March 2020, the Ministry of New and Renewable Energies (MNRE) had declared that upper tariff ceilings or tariff ceilings would no longer be prescribed in future calls for tenders.

PSPCL also proposed that all costs incurred by PSPCL for the opening, maintenance and other expenses related to the establishment of a letter of credit be borne by the solar energy developer. However, the Commission rejected this request because charging all these costs on the solar energy developer would only increase the tariffs.

The Commission has cleared PSPCL’s proposal to merge termination clauses for natural and unnatural force majeure, with common provisions for both.

PSPCL suggested deleting the provision stating that details of the reduction or reduction, including the justifications for such reduction, should be made public by the relevant load-sharing center. However, the Commission has retained the provision for the sake of fairness and transparency.

The Commission approved PSPCL’s request to retain the discretion to “take over the project or pay damages” and not leave this discretion to the developer of the solar project.

In the event of termination of the PPA, all damages or charges payable to STU / CTU for the connectivity of the project would be borne by the purchaser – this proposal of PSPCL was deemed unjustifiable by the Commission and disapproved.

In the event of a “change in the law”, the PSPCL offered relief for the solar energy developer. Accordingly, each 100,000 / MW net increase or decrease in the cost of the project would be responsible for a corresponding increase or decrease by an amount equal to 0.005 (~ $ 0.00067) / kWh in the tariff, which the commission approved.

PSPCL requested replacement of the guideline that if the Commission did not adopt the tariff within 60 days, the tariff would be deemed accepted. Instead, the PSPCL proposed that if there is a delay in the adoption of the tariff, the planned commissioning date be extended by an equal number of days during which the Council has delayed the adoption of the tariff. rate. The Commission accepted this point.

PSPCL also proposed to delete the provision for replacing the bank guarantee with a payment instrument on order or letters of commitment from the Indian Renewable Energy Development Agency (IREDA) or the Power Finance Corporation (PFC). or REC Limited. The Commission has given its consent.

The Commission also noted that all charges and losses beyond the point of delivery via the Interstate Transmission System (ISTS) to the outskirts of Punjab are exempt for all solar projects reaching the commercial operation date. before June 30, 2023, for 25 years. The Commission accepted the provision allowing the solar developer to be charged the same in the event of a delay in the date of commercial operation.

The exemption from ISTS charges has now been extended to solar and wind energy projects commissioned until June 30, 2025. The exemption applies only to ISTS charges and not to losses.

Solar energy projects connected to the 250 MW grid in Punjab of 10 MW and more

PSPCL suggests that the minimum project and supply capacity would be 5 MW. The offers would only be quoted in full values. A bidder may propose projects at more than one location, each with a minimum capacity of 5 MW and a total offered capacity not exceeding 250 MW. In view of the scarcity of the large tracts of land in the Punjab, the Commission authorized this modification in the tender documents.

PSPCL had recommended a ceiling tariff of 2.70 (~ $ 0.036) / kWh followed by a reverse electronic auction. The Commission authorized the specification of the ceiling tariff.

In a similar petition, the Maharashtra Electricity Regulatory Commission (MERC) had approved the waiver of tender guidelines for the purchase of electricity from solar projects sought by the Maharashtra State Power Generation Company. Limited.

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