Tamil Nadu Solar – Developers Commit 690 MW of Projects

Tangedco and the policy makers in Tamil Nadu have the last laugh. The Hindu has reported today that project developers in Tamil Nadu have come forward to set up 690 MW under the Tamil Nadu Solar Policy(The news is available here).
When the bids were opened(technical and commercial), the sentiment was one of disappointment, and the widespread view was that less than 200 MW will be commissioned in the state. In early March, The Hindu reported that LOI will be issued to developers for a total of 226 MW. In the following 2 month period, Tangedco worked behind closed doors to convince developers to commit more capacity. The result is there to be seen. The number of developers have increased from 30 to 53 in this period and the capacity has more than doubled.
One reason for the increase in the capacity is the fact that the developers got enough time to identify suitable land with evacuation. They also got time to work on improving the viability of their projects. When the bidding was announced in December 2012, the bidders got only a short duration of a month to arrange for land. By extending the deadline to May 31, Tangedco addressed one of the major complaints by the developers – the tight timelines.
Another possible reason could be the lack of project pipeline for most developers. The guidelines for the second Phase of JNNSM are still being discussed and the expectation is the project allocation under MNRE’s Viability Gap Funding mechanism will happen earliest only by end of July 2013. Similarly, the much anticipated solar allocation in Andhra Pradesh also turned out to be disappointing. In Rajasthan, developers did not find the tariff attractive and chose to stay away. Even in Punjab, bids were received only for 270 MW out of the total target of 300 MW. Project Development under the REC mechanism has also not been great, owing to the lack of RPO enforcement in states. Against this backdrop of lack of good options, Tamil Nadu solar, with all its risks, seems to be a better bet.
The Tamil Nadu solar sector has been like a thriller novel with so many twists and turns, with a positive ending in sight.
As Shakespeare said  “All’s well that ends well”.
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You are invited to join the Tamil Nadu solar group in LinkedIn and share your views there. The link to the group is http://www.linkedin.com/groups/Tamil-Nadu-Solar-4681107