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MoP Issues PSP Tariff-Based Bidding Guidelines Under Section 63

The Ministry of Power (MoP) has introduced tariff-based bidding guidelines under Section 63 for Pumped Storage Projects (PSPs). With a target of 74 GW/411 GWh of energy storage by 2031-32, these guidelines provide a structured procurement process to ensure transparency and efficiency. The guidelines provide two modes of project allocation to address challenges in site selection and feasibility.

Mode 1 (Procurer Identified Site):

The government or a procurer identifies the site, forms an SPV to manage feasibility studies and approvals, and transfers it to the successful bidder. This approach reduces developer risk.

Mode 2 (Bidder Identified Site):

Developers select their own sites and must secure all clearances independently. This offers more flexibility but higher risk due to potential delays.

Bidding Parameters:

1. Storage charge per MW/kW per year/month
2. Storage charge with Viability Gap Funding (VGF) or Annuity
3. Composite Tariff (Rs/kWh) covering input power and storage costs

Mode 1 attracts conservative investors due to lower risks from procurer involvement. Mode 2 appeals to high-risk investors looking for greater returns but facing regulatory hurdles.

These guidelines aim to balance risk and reward, ensuring competitive bidding while addressing infrastructure bottlenecks in India's pumped storage sector.