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Tamil Nadu Solar Power Tender

India’s Tamil Nadu Plans 1.5 Gigawatts Solar Power Tender

written by saurabh

The power utility of India’s Tamil Nadu state will yet again try its luck at auctioning large-scale solar power projects after it failed to draw interest miserably in the last two auctions.

Tamil Nadu Generation and Distribution Corporation (TANGEDCO) it set to auction 1.5 gigawatts solar power capacity. Prospective projects developers can bid for project sizes of one to 500 megawatts.

The maximum tariff bid allowed will be Rs 4.00/kWh. This threshold tariff is 64% higher than the current lowest solar power tariff in India of Rs 2.44/kWh.

The latest auction is not expected to breach this lowest tariff price. TANGEDCO is not among the best buyers of renewable energy and has been known to default on monthly payments to projects developers. Additionally, project developers in Tamil Nadu face frequent issues of non-availability of transmission infrastructure and are thus forced to shutdown their projects which leads to revenue loss.

TANGEDCO had offered 500 megawatts solar power capacity in February 2016 but received bids for just 177 megawatts. The utility put 500 megawatts capacity on the block again in November 2016 but received bids for 300 megawatts only.

Now, TANGEDCO is taking extra measures to ensure bidders are attracted towards the latest tender. The utility is offering 24 months to project developers to commission projects of size exceeding 50 megawatts; this is the longest time ever given to commission solar PV power projects in India. Project developers will also be compensated in case of unavailability of transmission infrastructure.

Tamil Nadu has very ambitious solar power targets but infrastructure support remains an issue.

According to government estimates, an installed capacity base of 2.5 GW will be required to meet the 5% solar RPO target in 2017-18. TANGEDCO, however, expects that only 1.6 GW solar power capacity would be operational by that time, thus leaving a shortfall of 900 MW.

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May 24, 2017 0 comment

Renewable Energy

500 Megawatts Solar Tender In India’s Tamil Nadu Undersubscribed Yet Again

written by saurabh

The latest solar power tender issued in the state of Tamil Nadu is in stark contrast to the one issued for the Newa solar power park. The former has, once again, received a poor response from the project developers.

The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) had floated a tender for 500 megawatts solar PV power capacity. The tender received bids by 22 project developers willing to set up 300 megawatts capacity. The poor response is poles apart from the 10 times oversubscription for the 750 megawatts Rewa solar power park.

The poor response it ironically still better than that received for the 500 megawatts tender previously issued by TANGEDCO. In November 2016, the tender attracted 20 bids of just 122 megawatts. The utility had no choice but to scrap the tender. Project developers were unable to purchase land for their projects due to lack of funds owning to the demonetisation drive of the Indian government.

The improved funding situation seems to have been the only reason for the relative increased interest of the developers. Lack of adequate transmission infrastructure and poor financial health of the utility remain the major concerns of bidders. The threshold tariff for this tender was also reduced by 14.7%, from Rs 5.10/kWh (7.6¢/kWh) to Rs 4.35/kWh (6.5¢/kWh), although developers have 12 months to commission the projects, an increase from 10 months.

According to government estimates, an installed capacity base of 2.5 GW will be required to meet the 5% solar RPO target in 2017-18. TANGEDCO, however, expects that only 1.6 GW solar power capacity would be operational by that time, thus leaving a shortfall of 900 MW.

February 22, 2017 0 comment

Renewable Energy

Indian Solar Tariff Bids Could Fall To New Low With Fresh 500 Megawatts Tender

written by saurabh

After failing to attract enough bids for the 500 megawatts solar power tender in October last year, the state’s power utility has issued yet another tender for the same capacity.

Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has issued a request for selection (RfS) document for auction and allocation of 500 megawatts solar power capacity. Prospective project developers can submit their bids by 10 February 2017.

The utility had issued a tender in October 2016 which saw a measly response of just 117 megawatts. There are some significant changes in this fresh tender.

Project developers will now be able to bid for upto a maximum capacity of 500 megawatts; thus a single company can secure the entire tender capacity. In the earlier tender, the maximum bid size was 50 megawatts only.

The maximum tariff bid in the October tender was INR 5.10/kWh (7.50¢/kWh) but this threshold has now been reduced to INR 4.50/kWh (6.60¢/kWh). The lowest tariff bid for utility-scale solar power project in India currently stands at INR 4.34/kWh (6.40¢/kWh) in Rajasthan. Thus, if this new tender is fully subscribed the existing lowest tariff bid record may very well be shattered.

There is all likelihood of developers quoting a new record low tariff bid. Since the Rajasthan tariff bid in January 2016 several significant developments have taken place that are conducive for a sharp tariff bid cut.

Interest rates have fallen sharply, especially following the demonetisation drive of the Indian government in early November 2016. Module prices continue to remain very low. TANGEDCO has signed up the financial restructuring plan for power utilities enhancing the prospects of timely payments to project developers. The Indian government has waived off a number of charges for inter-state transmission of solar and wind energy. The Ministry of New & Renewable Energy has also directed states to provide ‘must-run’ status to renewable energy projects.

January 18, 2017 0 comment

Renewable Energy

Demonetisation Hits One Of India’s Largest Solar Power Tenders

written by saurabh

It seems that the state of Tamil Nadu will have wait a bit longer to have the adequate solar power capacity operational to achieve the renewable purchase obligation.

Demonetisation drive implemented by the Indian government on 8 November has crushed the hopes of the state utility for an bumper solar power auction. State-owned power utility Tamil Nadu Generation and Distribution Corporation (TANGEDCO) had issued a tender for setting up 500 MW of solar PV power projects last month.

According to media reports, the utility has received only 20 bids with cumulative capacity of 116 MW. The reason for such poor showing is the inability of project developer to acquire land. Several developers reported that they were unable to pay cash to acquire land after currency notes of denomination Rs 500 and Rs 1000 were declared illegal for transactions starting 9 November 2016.

This auction for critical for TANGEDCO to increase the installed solar power capacity to a level which is closer to what it needs to meet the solar power purchase obligation.

Tamil Nadu Generation and Distribution Corporation (TANGEDCO) had approached the commission to let it auction this capacity as it would not be in a possible to meet the assigned target to acquire 5% of electricity from solar power projects for financial year 2017-18.

A tariff bid ceiling of Rs 5.10/kWh has been set for the purpose of competitive auction. TANGEDCO expects that the winning bids would be much lower, possibly closer to the national record low of Rs 4.35/kWh (US¢6.50/kWh).

November 30, 2016 0 comment

Renewable Energy

Indian State Of Tamil Nadu Issues 500 MW Solar Power Tender

written by saurabh

One of the leading Indian states in terms of installed solar power capacity, Tamil Nadu, has announced another large tender.

State-owned power utility Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has issued a tender for setting up 500 MW of solar PV power projects. The tender was floated just weeks after the Tamil Nadu Electricity Regulatory Commission had given an approval for the same.

However, participating developers may be apprehensive about the utilities record on procurement of solar power. Developers of some operational renewable energy projects had complained to the Ministry of New & Renewable Energy that the state utility had asked them to curtail generation due to lack of sufficient transmission capacity.

October 24, 2016 0 comment