The pre-bid meeting for the allocation of 1000 MW of solar projects under the ambitious Tamil Nadu solar policy was organized today by TANGEDCO at their office here in Chennai. The event was attended by the various stakeholders in the industry including some prominent project developers. More than 500 people turned up. The top officials from the concerned departments, including the CMD of TEDA, Mr. Sudip Jain, and Mr. Gnanadesian CMD of TNEB, TANGEDCO and Chairman of TANTRANSCO, answered the questions from the stakeholders. The presence of these officials clearly sent a positive message about the seriousness of the Tamil Nadu government in making the policy a success.
Following are some of the points that were raised during the meeting today
Power Purchase Agreement(PPA) & LC:
- The draft PPA is not yet available to the bidders and various developers raised the issue that the projects would not be bankable without the availability of the draft PPA. TANGEDCO responded by saying that the draft PPA would be posted on their website within the next couple of days.
- An important issue that was raised is that bankability of the project is subject to the PPA being vetted and approved by the state electricity regulatory commission (SERC) which, in this case, is TNERC as per the CERC guidelines. TANGEDCO made it clear that they have the backing of the TNERC and that project developers need not worry about this being an issue. In addition, the officials pointed out that TNERC has released a consultative paper about the solar policy and stakeholders can send their comments to TNERC by 28th December 2012(Click here for more details).
- As to why the PPA was to be signed for a period of only 20 years instead of 25, TANGEDCO felt that the duration of 20 years was sufficient to ensure financial viability of the project. However, there could be some changes to this should the investors still strongly feel that the clause needs to be amended.
- In the same vein, the issue of the lack of a draft LC affecting bankability was also raised. TANGEDCO has assured that the draft LC would be made available along with the draft PPA as soon as possible.
Technology:
- The plant capacity will be rated in terms of AC power( For eg., the minimum size of the plant will be 1 MW AC)
- TEDA and TANGEDCO reiterated that the solar policy is both technology neutral and there will be no domestic content requirement.
- There will be no separate tariff for systems using tracking systems.
- The TN solar policy does not specify and CUF requirements (as prescribed under the other policies such as JNNSM for instance) for the power plants and as such this might cause some issues with relation to how much energy generation can be reported/metered. TANGEDCO is of the view that while granting clearances for setting up solar power plants, site visits would be undertaken by experts to verify the claim of the developers and any discrepancies would be reflected on the metering systems in place and as such any attempts to game the system can be detected and nullified. However, this issue has been taken into account and should there by any imposed CUF requirements, it will be announced soon.
Land:
- TANGEDCO would play no role in securing the land required for the solar power projects as they feel that there are numerous other sources from whom this can be done. They further mentioned that TIDCO might be able to lend some assistance in this regard as there are numerous project developers (for instance Enfinity and more recently, Raasi Green Earth) who are looking to setup solar parks in the state.
- Some bidders expressed apprehension that taking possession of the land within the short timeline available under the policy could be a major challenge.
Load Flow Study:
- The cost for undertaking load flow study would be fixed at Rs. 2 lakhs (plus taxes) for all evacuation done upto 33 kV, while the study would cost Rs. 5 lakhs (plus taxes) for 110 kV and above.
- The voltage at which the power is to be evacuated would be recommended only after a load flow study is undertaken for that particular site. However as a general guidance, it can be assumed that for any power plant with capacity upto 3 MW can be evacuated at 11 kV while for capacity between 5 MW and 10 MW, 33 kV lines would be used while for capacities exceeding 10 MW, 110 kV and above lines would be used.
Evacuation:
- A detailed dossier containing the power evacuation facilities and the load supported at the various districts(at sub-station level) in Tamil Nadu was circulated during the meeting. This list should be available shortly on the TANGEDCO website.
- TANGEDCO made it abundantly clear that solar power developers or generators are permitted to establish lines and substations to evacuate the generated power. However if the evacuation facility is inadequate, TANTRANSCO will also strengthen the transmission infrastructure wherever required.
- The metering for the energy generated would done at the HT yard level of the power plant and not at a substation level. This is likely to be a boon for developers as the loss in wheeling of electricity generated to the substation would not be considered thereby improving returns to the developer.
Timeline:
- There would be no changes to the proposed schedule for the implementation of the solar policy even though some foreign investors voiced concerns of vacation periods in European regions etc. which might affect their capability to raise funding for the projects.
Others:
- Provision for registering for REC certificates would not be available for any developer.
- NSIC registered firms could specify bids without needing to supply an EMD so long as they were not equipment manufacturers as this provision would be applicable only to companies registered as power generators. It is up to the developer to get the necessary documentation to support this claim.
Overall, most of the queries raised were answered and those that were left unanswered would be answered by TANGEDCO at the earliest. TANGEDCO made it very clear that they are highly serious about this policy becoming a success and would ensure maximum cooperation from their side to ensure that every power plant comes online within the prescribed time limits.
Update 1: The details of the pre-bid meeting as reported by Panchabuta.com can be accessed here.
Update 2 : Clarifications on points raised during the pre-bid meeting can be found here .
Update 3 : The draft Power Purchase Agreement(PPA) can be downloaded here.
Note : We have started a LinkedIn Forum for sharing news,insights and perspectives on solar specific to Tamil Nadu. The group is updated every day and several stakeholders have already joined the group. I invite you to join the group and share your views there. The link to the group is http://www.linkedin.com/groups/Tamil-Nadu-Solar-4681107
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