Tamil Nadu DISCOM to Procure 500 MW of Solar Power Under KUSUM Program

The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the Tamil Nadu Generation and Distribution Corporation’s (TANGEDCO) proposal to procure 500 MW of solar power from projects with capacity in the range of 1 MW to 2 MW under Component A of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program. The ceiling tariff has been set at ₹3 (~$0.040)/kWh.

The Commission approved the deviations sought by TANGEDCO in the draft tender document and the draft power purchase agreement (PPA).

The Commission said that if the capacity under Component A exceeds the limit of 2 MW, approval from the Ministry of New and Renewable Energy (MNRE) should be sought.

TANGEDCO had sought approval to purchase 500 MW of power from solar projects of capacity 1 MW to 2 MW with a ceiling tariff of ₹3 (~$0.040)/kWh under the PM-KUSUM program.


Background

Under Component A of the PM-KUSUM program, the government aims to set up 10,000 MW of grid-connected solar power projects of individual project size up to 2 MW.

TANGEDCO, in its submission, said it had proposed projects under Component A of the PM-KUSUM program for a total capacity of 500 MW to meet renewable purchase obligation targets.

In 2018, the Commission had advised TANGEDCO to procure solar power in three stages of 500 MW each with a ceiling price of ₹3/kWh, instead of issuing a single tender for the entire quantity of 1,500 MW.

TANGEDCO subsequently floated a tender but canceled it as it did not receive any response.

Hence, TANGEDCO proposed to utilize the 500 MW out of the 1,500 MW capacity for which the Commission accorded approval under Component A of the PM-KUSUM program.

In February this year, TANGEDCO floated a tender to set up 500 MW of solar projects under Component-A of the PM KUSUM program.

Commission’s analysis

The Commission observed that TANGEDCO had sought approval for deviations regarding interconnection through both new and existing transmission lines to invite more bids. It said that though the developer had to abide by the regulations of Central and State Electricity Regulatory Commissions, the exact position of the metering point should be made clear. The Commission allowed the deviation.

The Commission allowed TANGEDCO to seek bids for capacities from 1 MW to 2 MW. MNRE notification specifies capacities between 500 kW and 2 MW.

The state regulator also approved other deviations like the late payment surcharge at 1% instead of 1.5% specified by MNRE, waiver of the letter of credit mechanism of payment security, and timelines for payment of monthly bills.

In September this year, TNERC approved the tariff of ₹2.61 (~$0,036)/kWh, including the trading margin of ₹0.07 (~$0.0009)/kWh, for procuring 1,000 MW of solar power from the Solar Energy Corporation of India.

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