The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has issued a tender for 500 MW of wind power projects in the state. The bid-submission deadline is December 28, 2018.

TANGEDCO has fixed ₹2.65 (~$0.037)/kWh as the upper tariff ceiling for this tender. A single bidder must bid for a minimum capacity of 25 MW with at least 5 MW of project at one site. A single bidder can bid for the entire capacity (500 MW).

TANGEDCO will enter 25-year power purchase agreements (PPAs) with the successful bidders. The scope of work includes the establishment, maintenance, and operation of wind power projects and supplying the generated solar power to TANGEDCO under long-term PPA at the tariff finalized through reverse bidding.

TANGEDCO issued the tender after getting Tamil Nadu Electricity Regulatory Commission (TNERC)’s approval. Recently, TNERC accepted the request for modifications in TANGEDCO’s RfS and PPA documents, by adding clauses related to payment security, change in law, and relaxation from compliance of FDI laws by foreign bidders. The request was granted in view of TANGEDCO’s 25 year-PPA that it will be entering into with solar and wind power generators for the tenders of 1,500 MW each of wind and solar.

TANGEDCO is tendering wind projects after an over year-long hiatus. Before this, TANGEDCO had tendered 500 MW of wind projects in June 2017.

Recently, TNERC issued a new levelized generic tariff for the procurement of wind-based power in the state for the financial year (FY) 2018-19. The tariff for wind power was fixed at ₹2.86 (~$0.0438)/kWh without accelerated depreciation (AD) and ₹2.80 (~$0.0429)/kWh with AD. The AD component of the tariff is ₹0.06 (~$0.00092)/kWh.

Even if the levelized tariff depreciates over the coming years, it will not be lower than the tariff ceiling set by TANGEDCO for this tender. Moreover, the lowest wind tariff quoted in an auction in India is ₹2.43 (~$0.038)/kWh, and after that most auctions have been won by firms bidding around a 20-25 paise/kWh cushion of the lowest ever wind tariff.

Tamil Nadu announced its plan to tender 3 GW of renewable energy capacity, consisting of 1.5 GW of solar projects and 1.5 GW of wind power projects in March 2018 and received TNERC’s approval in April.

Tamil Nadu is one the windy states with highest wind potential, so this tender can be predicted to be a win for both the procurer and the developers.