Power Ministry amends bidding rules for renewable energy procurement

On June 25, 2025, the Ministry of Power issued amendments to the guidelines for Tariff Based Competitive Bidding (TBCB) for procuring power from grid-connected renewable energy projects. The revised norms apply to solar, wind, wind-solar hybrid, and firm dispatchable power projects with energy storage.

The changes were shared through a formal communication to stakeholders, including the Ministry of New and Renewable Energy (MNRE), Central Electricity Authority (CEA), and state electricity regulatory commissions. Stakeholders have until July 9, 2025, to submit their feedback.

Key changes include:

1. Approval timelines for power sale agreements (PSAs)
   If power is procured through an intermediary and the end procurer is a distribution licensee, the licensee must now approach the appropriate commission for approval under Section 86(1)(b) of the Electricity Act within 30 days of PSA signing, unless already approved. This aims to reduce delays in regulatory approvals.
2. Automatic SCOD extensions for delay in commission approvals
   If the commission does not approve the PSA or adopt the tariff within 60 days of application, or 120 days from PSA signing, the procurer must extend the Scheduled Commercial Operation Date (SCOD) by the duration of the delay. This ensures generators are not penalised due to regulatory lag.
3. Reduction in performance bank guarantee (PBG)
   The PBG requirement has been lowered from 5% to 3% of the estimated project cost for bids invited during a given financial year. The change applies to all solar, wind, hybrid, and energy storage projects to ease financial burdens on developers.
4. Flexibility in hybrid project documentation
   For wind-solar hybrid projects, procurers can add detailed provisions to bidding documents without prior approval, provided they align with the guidelines. Any deviations, however, still require commission approval.

These revisions build upon earlier guidelines issued in 2023 and subsequent amendments in November 2023, February 2024, and February 2025. They are aimed at expediting project implementation and reducing regulatory and financial barriers for renewable energy developers.

Key stakeholders, including state discoms, the National Solar Energy Federation of India (NSEFI), and industry associations such as FICCI, are currently reviewing the proposed changes.