+
Ministry of Power eliminates penalties for RE power delays
POWER & RENEWABLE ENERGY

Ministry of Power eliminates penalties for RE power delays

The Ministry of Power (MoP) has made revisions to the guidelines governing the tariff-based competitive bidding process for procuring firm and dispatchable renewable power from grid-connected solar, wind, wind-solar hybrid, and renewable energy projects with energy storage.

The updated guidelines eliminate the provision concerning punitive measures for delays in initiating power supply. Previously, if the power supply commencement exceeded the scheduled commercial operation date (SCOD) by up to six months, the generator faced penalties, including the encashment of the performance bank guarantee or alternative instruments on a per-day basis proportional to the contracted capacity not delivering power.

For delays surpassing six months from the SCOD, the contracted capacity was reduced to the project capacity that had initiated power supply within the SCOD plus six months. Consequently, the power purchase agreement (PPA) for the remaining contracted capacity, which had not commenced power supply, was terminated.

Under the prior guidelines, generators risked being debarred from participating in bids by any procurer or intermediary procurer for one year after the first default and for not less than two years and not more than three years for the second and subsequent defaults.

Typically, developers or power generators were expected to initiate power supply within 24 months from the PPA execution date for allocations not exceeding 1 GW and within 30 months for allocations exceeding 1 GW. However, the procurer now has the flexibility to adjust the SCOD period if needed.

Mercom Research suggests that this relaxation might result in delays in project installation and commissioning. In the previous year, the Ministry of New and Renewable Energy instructed public sector undertakings to blacklist renewable energy developers failing to complete projects within deadlines, with potential blacklisting spanning 3-5 years. During the second quarter of 2023, solar project delays and postponements led to a 46% decline in investments.

The Ministry of Power (MoP) has made revisions to the guidelines governing the tariff-based competitive bidding process for procuring firm and dispatchable renewable power from grid-connected solar, wind, wind-solar hybrid, and renewable energy projects with energy storage. The updated guidelines eliminate the provision concerning punitive measures for delays in initiating power supply. Previously, if the power supply commencement exceeded the scheduled commercial operation date (SCOD) by up to six months, the generator faced penalties, including the encashment of the performance bank guarantee or alternative instruments on a per-day basis proportional to the contracted capacity not delivering power. For delays surpassing six months from the SCOD, the contracted capacity was reduced to the project capacity that had initiated power supply within the SCOD plus six months. Consequently, the power purchase agreement (PPA) for the remaining contracted capacity, which had not commenced power supply, was terminated. Under the prior guidelines, generators risked being debarred from participating in bids by any procurer or intermediary procurer for one year after the first default and for not less than two years and not more than three years for the second and subsequent defaults. Typically, developers or power generators were expected to initiate power supply within 24 months from the PPA execution date for allocations not exceeding 1 GW and within 30 months for allocations exceeding 1 GW. However, the procurer now has the flexibility to adjust the SCOD period if needed. Mercom Research suggests that this relaxation might result in delays in project installation and commissioning. In the previous year, the Ministry of New and Renewable Energy instructed public sector undertakings to blacklist renewable energy developers failing to complete projects within deadlines, with potential blacklisting spanning 3-5 years. During the second quarter of 2023, solar project delays and postponements led to a 46% decline in investments.

Next Story
Real Estate

Rs 24.4 Trillion Worth Of Plots Launched Since 2022

Housing plots worth Rs 24.4 trillion have been launched across India’s top tier-I and tier-II cities between January 2022 and May 2025, driven by post-Covid demand for customisable living spaces, according to data from real estate analytics firm PropEquity.During this period, developers rolled out approximately 470,000 residential plots across ten cities—Hyderabad, Indore, Bengaluru, Chennai, Nagpur, Jaipur, Coimbatore, Mysore, Raipur, and Surat.Samir Jasuja, Founder and CEO of PropEquity, stated that the increasing popularity of residential plots stems from their liquidity and stronger ap..

Next Story
Infrastructure Urban

Wyndham, Cygnett To Add 60 Hotels Across South Asia

Wyndham Hotels & Resorts has entered into a strategic alliance with Indian hospitality group Cygnett Hotels & Resorts to significantly expand its presence across South Asia. The collaboration will bring Wyndham’s La Quinta and Registry Collection Hotels brands to India, with plans to develop over 60 hotels across India, Bangladesh, Sri Lanka, and Nepal in the next ten years.This move seeks to capitalise on the growth of India’s travel and tourism industry, fuelled by infrastructure investments, a growing middle class, and rising domestic and international tourism.Dimitris M..

Next Story
Infrastructure Urban

Marengo Asia To Invest Rs 1.5 Billion In West India Expansion

Marengo Asia Healthcare, a prominent multi-specialty hospital platform backed by marquee investors including Samara Capital, Havells Family Office, and the Godrej Family Office, has announced a strategic investment of Rs 1.5 billion to expand its presence into Maharashtra and Rajasthan. The move is part of the group’s wider vision to build a pan-India network by strengthening its operations across northern and western India.Currently operating around 1,500 beds across four hospitals in Delhi NCR and Gujarat, Marengo plans to double its bed capacity to 3,000 within the next 12 months. This wi..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?