The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the procurement of 500 MW of solar power from the Solar Energy Corporation of India (SECI).

The tariff approved for the procurement is ₹2.78 (~$0.036)/kWh and will help meet Tamil Nadu Generation and Distribution Corporation Limited’s (TANGEDCO) solar renewable purchase obligation (RPO).

Background

TANGEDCO had filed a petition before the Commission seeking permission to procure 500 MW solar power from SECI under 1,200 MW interstate transmission system (ISTS) tender floated under Tranche VI.  The project is expected to be commissioned during FY 2021-22.

TANGEDCO had requested the approval of the tariff ₹2.71 (~$0.04)/kWh, along with a trading margin of ₹0.07 (~$0.001)/kWh.

As per the Ministry of New and Renewable Energy (MNRE) target, approximately 9 GW of solar capacity is required to meet Tamil Nadu’s solar purchase obligation in FY 2021-22.

According to Mercom India’s Solar Project Tracker, Tamil Nadu has an installed solar capacity of approximately 3.6 GW as of Q1 2020.

The state needs to add 5 GW of solar in the next two years to meet the target set by MNRE.

The state agency had floated solar tenders in the past but could not meet the desired results. Therefore, TANGEDCO decided to authorize SECI to float the tender for the procurement of 1,500 MW of solar power in three stages.

In the meantime, SECI  requested TANGEDCO to confirm its requirement under the Tranche VI tender for 1.2 GW. Considering the tariff of ₹2.78 (~$0.036)/kWh to be competitive, TANGEDCO requested for the adoption of this tariff for the procurement of 500 MW solar power.

A few months ago, the Tamil Nadu Electricity Regulatory Commission (TNERC) issued a consultative paper for procuring solar power by distribution licensees. In the consultative paper issued by the Commission, it proposed the procurement of solar power by distribution licensees through the competitive bidding process following the bidding guidelines issued by the central government (which is already happening). The power can also be procured from the projects contracted through a competitive bidding process by SECI to comply with their renewable purchase obligations targets.