The Ministry of New and Renewable Energy (MNRE) has issued a memorandum clarifying the non-requirement of no-objection certificates (NOCs) from the intermediatory procurer/buying entity/end procurer in existing and future bids or power purchase agreements (PPAs) under firm and despatchable renewable energy (FDRE) bidding guidelines when an energy storage system (ESS) is charged using non-renewable power, and sold under merchant/third-party sale mode, and when the corresponding renewable energy source is not commissioned.
The clarification follows representations received from renewable energy industry associations. According to the MNRE, ESS are categorised as storage components and not renewable energy generating sources. Furthermore, power discharged from an ESS that is charged using non-renewable sources does not qualify as renewable energy under the applicable guidelines.
Additionally, the MNRE has reviewed provisions under the tariff-based competitive bidding framework for the procurement of FDRE. It has been noted that developers are allowed early commencement of supply from individual project components outside the ambit of the power purchase agreement. In such cases, developers are required to provide a 15-day advance notice to end procurers and intermediary procurers. These entities must respond within 15 days. If no acceptance is received within this period, developers may sell the unaccepted power through power exchanges or bilateral arrangements. Where acceptance is granted, end procurers are given priority, and the applicable tariff is capped at up to 50 per cent of the PPA tariff or as specified in tender documents.
Moreover, the MNRE has clarified that the right of first refusal by end procurers or intermediary procurers applies only to renewable energy generated from commissioned solar or wind projects. This provision does not extend to power discharged from ESS where such systems are charged using non-renewable sources. In cases where storage systems are commissioned before renewable generation components, and are charged through the grid, such power is not eligible under the power purchase agreement. Therefore, such electricity can only be sold under merchant or third-party arrangements. In view of this, the MNRE has clarified that no NOC is required from procuring entities for such transactions until at least one renewable energy generating component is commissioned.