New tender floated after its earlier one received a tepid response. The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has received bids for 300 MW of solar power from as many as 22 developers for its 500 MW tender. The State power utility had floated a tender for procuring 500 MW of solar power, after its previous tender last year received a tepid response. The price bids would be opened on February 18. TANGEDCO had reduced the upper tariff limit to ₹4.50/kwh in the new tender from ₹5.10 per unit in the preceding one — a 12 per cent decrease. Also, the project commissioning timeline has been extended to 12 months, as opposed to 10 months in the previous tender.
According to Mercom Capital Group, the benchmark tariff limit of ₹4.50/kwh is viable, given the fall in module prices. However, late payments and curtailment of solar power would be the key risks facing the developers. In the earlier tender, TANGEDCO had received bids from 20 developers for setting up solar power plants in the State for a combined capacity of 122 MW. However, of the 500-MW capacity in total, only 20 MW had been finalised. Hence, the power utility had proposed floating another tender for 500 MW, according to TANGEDCO’s petition to the Tamil Nadu Electricity Regulatory Commission (TNERC). The TNERC has set a renewable energy purchase obligation of 2.5 per cent for the financial year 2016-17 and 5 per cent for 2017-18. To meet this target, 1,500 MW of solar power is required for FY 2016-17 and 3,200 MW for FY 2017-18.