After receiving little interest from developers for its 500 MW solar PV tender floated in November 2016, the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) has once again come out with another 500 MW tender.
The agency needs to meet its renewable purchase obligation (RPO) targets of 2.5% for the year 2016-17, and 5% for the year 2017-18. This translates into 1,500 MW and 3,200 MW of PV capacity, respectively.
TANGEDCO has now fixed a tariff of 4.50 INR per kWh ($0.066) as the upper limit in a reverse bidding The minimum capacity to be developed is 1 MW in a single location for a single bidder, which can be one company or a group of companies. The power from this project will be sold to TANGEDCO for a period of 25 years. The last date of request for submission (RFS) of documents is February 2, 2017 with the techno-commercial bid to be opened the same day. Documents are available for download as of January 6, 2017 on the website of TANGEDCO or the Government of Tamil Nadu website. The documents can also be viewed here. Price bids will be opened on February 18, 2017.
The November 2016 500 MW tender received only 20 bids for a total capacity of 116 MW – and that was mainly from smaller developers as the big ones kept away from the bidding process (see Tamil Nadu Tender Receives Unenthusiastic Response). The benchmark tariff for the tender was 5.10 INR per kWh ($0.074). Industry experts had stated late payments to developers, grid curtailment, stringent criteria as some of the reasons that led to the disinterest in the previous 500 MW tender.
This time, the project commissioning date has been increased to 12 months, from 10 months in the last tender.
The state has now also joined Ujwal DISCOM Assurance Yojana (UDAY), which is a central government program to help financially distressed distribution companies (discoms). The total Indian discom debt is pegged at 4,000 billion INR ($58.9 billion), out of which Tamil Nadu's share is 500 billion INR ($7.4 billion), according to Mercom Capital Group. UDAY is aimed at helping TANGEDCO save on 'interest costs, reduce aggregate technical and commercial (AT&C) and transmission losses and initiate energy efficiency measures'. Around 75% of TANGEDCO's debt will now be taken over by the state government, coming to a total of 304.2 billion INR ($4.48 billion).
Raj Prabhu of Mercom said, "Tamil Nadu is possibly the most important state to join UDAY due to its high debt levels, its inability to pay solar and wind power producers on time and its curtailment of solar and wind power to avoid paying for generated power."
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