MNRE issues new guidelines for solar power procurement through the TBCB route

The MNRE has clarified that under the new guidelines for tariff-based competitive bidding for solar power procurement, unilateral termination or modification of PPAs by state authorities is prohibited. In addition, a minimum 50 per cent tariff penalty will be imposed on discoms that back down solar power. The norms were issued in August 2017. The MNRE has also introduced a payment security mechanism through instruments like letter of credit, payment security fund and state guarantee, in order to tackle the risk of generators’ revenue being blocked due to delayed payment or non-payment by procurers.