After its 1.5 GW tender stirred unprecedented interest among developers attracting technical bids of 3.7 GW, the Tamil Nadu utility is now set to sign PPAs at the rate of INR 3.47 (~$0.054)/kWh for a period of 25 years.
In the wake of what appears to be its most successful tender to date, the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) is now set to sign power purchase agreements (PPAs) for 1.5 GW of solar at INR 3.47 (~$0.054)/kWh, with NLC India, a state-owned mining company, emerging as the biggest winner with 709 MW.
“All the bidders are willing to sign the PPA at Rs.3.47 (~$0.054)/kWh, the lowest price quoted in the 1,500 MW tender,” said a TANGEDCO official, as reported by Mercom Capital.
Due to its poor reputation for late payments and curtailment, two of TANGEDCO’s previous tenders were undersubscribed. Namely, in its consecutive solar tenders of 500 MW, TANGEDCO received bids to develop a mere 177 MW in February and only 300 MW in November last year. This time, however, not all bidders were awarded the desired capacities.
“Solitaire BTN Solar Private Limited had bid for 150 MW, but was awarded 100 MW; Rays Power Infra bid for 200 MW, but was awarded 100 MW, and NLC India had bid for the entire 1,500 MW, but was awarded 709 MW”, added the TANGEDCO official.
In order to meet its Renewable Purchase Obligation (RPO), which was set by the Tamil Nadu Electricity Regulatory Commission (TNERC) at 2.5 % for FY 2016-17, and 5 % for FY 2017-18, TANGEDCO went out of its way to attract more developers in its 1.5 GW tender invited in May, which had the upper tariff limit set at INR 4 ($0.062)/kWh. Namely, the corporation extended the deadline for completion of solar projects to 24 months and specified compensation for generation losses in the terms, so in case the developer faces grid unavailability for more than 175 hours in a financial year, the excess generation by the project in the succeeding financial years will be procured by TANGEDCO at the PPA tariff.
Commenting on the expected date of PPA signing, the official said: “We are awaiting TNERC’s approval. Once the TNERC gives a go ahead, the PPAs will be signed immediately.”
While improving its tenders for utility-scale projects, TANGEDCO is also looking to introduce measures to encourage the underdeveloped rooftop sector in India’s third biggest solar state, as it proposed to slash its net metering tariff from INR 6.63 – 7.23/kWh to potentially as little as INR 2.20/kWh with the state’s 3.5 GW rooftop solar target in sight.