Solar tariff fixed at Rs 5.1 for pending projects
Solar power projects for whcih MOUs had been signed with Tangedco but could not be commissioned by Thursday will be paid only Rs 5.10 instead of Rs 7.01 per unit as per the power purchase agreement (PPA). The Tamil Nadu Electricity Regulatory Commission (TNERC) has fixed the final tariff with effect from April 1, 2016. In a unanimous order, the TNERC has increased the tariff mentioned in the consultative paper floated in February by 9 paise per unit.
So far PPAs have been signed for 1,400MW but only 812MW capacity projects have been commissioned. The TNERC has not considered Tangedco’s proposal of lowering the tariff to Rs 4.66 in the consultative meeting held earlier this month. The TNERC continues with power purchase mode while other states have switched to tender mode and are capitalising on falling solar equipment prices.”The Commission has observed that each bidding by different state utilities for solar energy finds a new low in terms of cost of energy. Various stakeholders attribute various reasons for such low tariffs. Some of them have said these prices are unsustainable. However, the fact remains that the prices for solar energy continue to fall and has reached as low as Rs.4.34 per unit as on date,” said the TNERC order.
The solar power companies which have commissioned the projects are of small capacity except Adani Power company’s project. “Out of the 648MW for which Adani company signed PPA with Tangedco, around 314MW alone have been commissioned. Other companies which have commissioned projects so far have smaller capacity of 1MW or less than,” a senior Tangedco official told TOI.Apart from Adani other big companies which have commissioned solar power projects are SunEdison and Welspun. “While SunEdison signed PPAs for setting up 150MW, Welspun signed PPAs for 200MW. Of this only less than 100MW has been commissioned by these two companies so far,” said the official.
Tangedco suggested the tariff at Rs 4.66 per unit after taking the interest rate at 12% for projects which are taking loans from banks and working capital. “While TNERC said the interest rate would be 13% and this was based on CERC norm. But Tangedco said it was possible for companies to get loans at 12%. We need to discuss within our commission and mostly we will settle for the tariff at Rs 4.89 per unit taking the interest rate at 12.5%,” said the official.
After a long time, the TNERC has issued a unanimous order as former TNERC member S Nagalsamy has retired. Nagalsamy took oath as member before 2011 and used to oppose orders passed by the commission. But the present members and chairman of the commission were appointed between 2011 and 2016 and there is no dissenting order.