Tamil Nadu Solar – Bids for 300 MW submitted

Tamil Nadu, the number one state in solar installations in India at the end of 2016(see here), has received bids for setting up 300 MW of solar power. According to The Hindu, 22 developers have submitted bids to TANGEDCO. The benchmark tariff is Rs. 4.50/kWh.
The tender was floated for 500 MW, but once again not too many developers have show interest since bids for only 300 MW has been received.( In comparison, bids for about 7500 MW were received for the proposed allotment of 750 MW in the recently concluded bidding for solar projects in Rewa Solar Park). However, the response is much better than the last time the tender was floated when bids were received for only 122 MW(out of which only 20 MW was finalised at the rate of Rs. 5.10/kWh). Some of the reasons cited for the low interest include

  • grid curtailment(more here) leading to losses to developers (one of the reasons for the success of the Rewa tender is that developers will get paid in the event of curtailment under deemed generation clauses)
  • Delay in payments – Rajasthan and Tamil Nadu have a not so good track record on this parameter(more here)
  • Very short project completion timeline of 10 months. The same has been extended to 12 months in the recent tender

TANGEDCO is in bad financial health, and that is the root cause for some of the above mentioned problems. One of the positive developments that have happened since the last failed tender has been that TANGEDCO joined the UDAY Scheme that is intended to turnaround DISCOMS and nurse them to profitability. In January 2017, Tamil Nadu became the 21st state to become part of the UDAY Scheme. (The list of states that are part of the UDAY scheme can be found here).
With the addition of this 300 MW, Tamil Nadu will hope to retain its Numero Uno status, but other states are closing in fast.
(This blog  is supported by Aspiration Cleantech Ventures)