SECI To Hold Solar/Wind Auctions For TANGEDCO

Flailing Financial Health & Reputation Of Curtailing Solar & Wind Power Capacity Forces TANGEDCO To Hand Over Tender Responsibility To SECI: Media
02:16 AM (Beijing Time) - 21. May 2019
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Key Takeaways

  • Mercom India Research and The Economic Times in India have reported that TANGEDCO is looking up to SECI to launch and complete solar and wind power auctions for it
  • TANGEDCO will procure renewable energy procured thus from SECI; the central government agency is likely to float 500 MW solar tender, for which TANGEDCO has received no response at all, once election results are announced in the country
  • TANGEDCO has been forced to take the decision as it has been unable to make timely payments for the capacity it has already procured via tenders
  • Developers are also said to be wary of the discom curtailing solar and wind power capacity

The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) will no longer call for and conduct solar and wind power auctions, instead the Solar Energy Corporation of India (SECI) will do it on its behalf. The reason for this is the reputation of TANGEDCO delaying its tariff payments by more than a year to renewable energy developers which has made developers wary of applying for its tenders, according to Mercom India Research. At the same time, TANGEDCO is known to be notorious for curtailing solar and wind power.

Floating solar power tenders since 2015, TANGEDCO is yet to receive a single bid to its 500 MW solar tender launched in November 2018 that is capping bids at INR 3.00 ($0.042) per kWh, according to The Economic Times (ET) (see TANGEDCO Launches 500 MW PV Tender). Another wind power tender with similar capacity also found no takers, according to local media reports.

Perceiving the developer sentiment, TANGEDCO has decided to hand over the responsibility of issuing solar and wind power tenders to SECI and the latter will procure and sell renewable energy capacity to TANGEDCO. The said 500 MW solar tender will also be re-issued by SECI once the election results are announced, as per the reports.

In April 2019, SECI launched a request for selection round for a 500 MW grid connected solar power tender for Tamil Nadu as part of Phase-I of the National Solar Mission. It will sign power purchase agreements with the winners and then sell the power to TANGEDCO (see 500 MW Solar Tender For Tamil Nadu From SECI).

“This was a long time coming, and it is a well-known fact that Tamil Nadu is the riskiest state to develop solar and wind projects. The move to transfer tendering responsibilities to SECI is a positive one for the developers and opens up development opportunities once again in Tamil Nadu,” said Raj Prabhu, CEO of Mercom Capital Group.  

According to the Ministry of New and Renewable Energy (MNRE), as of March 31, 2019 Tamil Nadu’s total installed solar power capacity was over 2.57 GW, including rooftop solar. Under Tamil Nadu Solar Energy Policy 2019, the state aims to have 9 GW of installed solar energy generation capacity by 2023 (see Tamil Nadu Aims For 9 GW Solar By 2023).

Speaking of SECI, the central government agency is not without problems of its own. Multiple deadline extensions for a number of solar tenders and unenthusiastic response to its auctions is not a rarity anymore. Very recently its 1.2 GW solar and wind hybrid tender was undersubscribed by 300 MW with only 2 companies submitting bids (see SECI Auctions 250 MW For Dondaicha Solar Park).

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani