The state power utility has failed to get any response for the solar power tenders it floated in November last year

CHENNAI: The state power utility has failed to get any response for the solar power tenders it floated in November last year. The base tariff was Rs 3 a unit. This is the first time Tangedco is facing such poor response for solar tenders being floated since 2015. 

The issue is Tangedco’s failing financial health. Sources told TOI that bidders wanted the power utility to give guarantees on payments for the purchase of power from private solar companies. But, faced with financial difficulties, the discom refused to provide any guarantee. 

Tangedco floated tenders for 500MW each of solar and wind power after the Tamil Nadu Electricity Regulation Commission (TNERC) gave its nod. The companies that were awarded the tenders had to complete their projects within a year.

“The bidders sought a timely payment guarantee, which we are unable to provide because of our financial difficulties. Moreover, they wanted the ceiling tariff to be removed. But that is not in Tangedco’s hands as it is a condition imposed by the TNERC,” a senior official, seeking anonymity, told TOI. 

Solar and wind power companies said it took no less than nine months to get their dues from Tangedco for power sold to the discom. “Some companies are able to get their payments within nine months. But, on average, almost all companies get their payments only after a year. This must be one of the main reasons for solar power firms being reluctant to participate in the tender process,” said the head of a company.

A single bidder must bid for a minimum capacity of 25MW with at least 5MW of project one site. A single bidder can also bid for the entire capacity (500MW). The discom was set to enter into a 25-year power purchase agreement (PPA) with successful bidders. The work includes the establishment, maintenance, and operation of wind power projects and supplying the generated solar power to Tangedco under long-term PPA at tariff finalized through reverse bidding.

Tamil Nadu has lost the race in solar power capacity building to other states while boasting maximum capacity in wind power generation. Tamil Nadu has only 9% of the total Indian solar capacity while Karnataka has 24%, Andhra Pradesh 11% and Telangana 16%. With zero response to the tenders, Tamil Nadu’s solar capacity may go down further this year.

News Source: ET Energyworld