Chennai: Tangedco has stopped floating bids for solar and wind power farms — a reflection of its inability to give a commitment to investors on power evacuation and timely payment for evacuated power. From now, the bids will be floated by Solar Energy Corporation of India Limited (SECI). The discom’s tenders floated in the last two financial years did not evoke any response from investors.
Tamil Nadu is one of the biggest solar and wind power generators in the country. The installed solar power generation capacity is about 2,700MW and for wind energy, it is 8,500MW.
If Tamil Nadu has to buy power from new solar and wind power farms to be set up in future, to fulfil its renewable power purchase obligation, it will have to buy from SECI. SECI is the renewable energy ministry’s nodal agency. It holds wind and solar auctions.
Tangedco, which used to sign MoUs to purchase solar power from firms, has already switched to the tender mode. It has helped the state take advantage of the falling solar and wind power tariff. Earlier, it had signed an agreement with Adani to purchase solar power at Rs 7.01 a unit in 2015. The very next year, the tariff fell by Rs 2 a unit in the tender mode. Though the SECI will be floating the bids on behalf of Tangedco, the base tariff for the tenders will be decided by the Tamil Nadu Electricity Regulatory Commission (TNERC).
“We expect a better rate while purchasing power through SECI. Because of its payment security mechanism, it will be able to attract investors at competitive tariffs. It will increase investors’ confidence too. All these are subject to TNERC guidelines and directions,” said a senior Tangedco official. SECI is already floating tenders for many states.
Tangedco had floated tenders for 500MW each of solar and wind power following the TNERC giving its nod to the discom to float tenders for the last financial year. The companies winning the tenders were supposed to complete the project in a year. But no firm participated in the bid.
“Bidders wanted a timely payment guarantee, which we were unable to provide because of our financial difficulties. They also wanted the ceiling tariff to be removed, but that is to be decided by TNERC,” said the Tangedco official.
Solar and wind power companies told TOI that it takes not less than 9 months for them to get payment from Tangedco after selling power to the discom. This is the main reason why no solar power firm participated in the Tangedco tender, said a solar company chief.