According to reports, the Tamil Nadu Generation and Distribution Corporation (Tangedco) has received the lowest price bid of ₹4.40 per kilowatt hour for its 500 MW solar tender, lower than its benchmark tariff of ₹4.50/kwh.
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. In the new tender, it had received bids from 22 developers to set up 300 MW of capacity.
“The price bids were opened on Saturday and a Tirunelveli-based firm has bid for 100 MW of capacity at a price of ₹4.40 per unit,” according to Tangedco official.
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. The project commissioning time line was extended to 12 months as opposed to 10 months the previous tender.
Solar tariffs hit a record low of ₹3.30/kwh in the recent auction at Rewa Solar Park in Madhya Pradesh, surpassing the previous record of ₹4.34/kwh reached in January 2016.
According to Mercom Capital Group, Tamil Nadu’s benchmark tariff limit of ₹4.50/kwh is feasible, 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 received bids from 20 developers for setting up solar power plants in the State for a combined capacity of 122 MW.
Of the 500 MW capacity, 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.
As on December 31, 2016, Tamil Nadu’s total solar generation capacity was 1,600 MW.