The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has cancelled a 500 MW solar tender it had issued in January 2017.

A TANGEDCO official confirmed the cancellation of the 500 MW tender and said there had been a long-drawn out negotiation between winners (project developers) and TANGEDCO upon the tariffs quoted, moreover technical bids for the entire capacity was not received and no power purchase agreements (PPAs) had been signed so the TANGEDCO decided to scuttle the tender.

When asked to elaborate, the TANGEDCO official replied, “We just signed PPAs for 1,500 MW at ₹3.47 (~$0.054)/kWh and signing PPAs for just over 200 MW at tariff above ₹4 (~$0.063)/kWh does not make sense. We haven’t backed out of any written and signed contract. If the companies had wanted they could have signed the PPAs way back instead of renegotiating with us on tariffs.”

Mercom previously reported that TANGEDCO tendered 500 MW of solar to meet its renewable purchase obligation (RPO), and received technical bids to develop 300 MW of solar. The lowest bidder quoted ₹4.40 ($0.065)/kWh, which is ₹0.1 (~$0.0016)/kWh lower than the benchmark cost set by TANGEDCO.

Another TANGEDCO official told Mercom, “we met to decide whether to carry forward this tender or not and it does not make sense to go for projects that will provide power at above ₹4 (0.063)/kWh when we already have ₹3.47 (~$0.054)/kWh tariff.” The TANGEDCO has decided after a meeting that it will issue another tender with a different upper tariff ceiling, added the TANGEDCO official.

According to Mercom’s India Solar Project Tracker, 17 solar projects aggregating 224 MW capacity (allocated in 500 MW auction) has been cancelled.

The Tamil Nadu Electricity Regulatory Commission (TNERC) has set RPO targets of 5 percent for FY2017-18. To meet its RPO targets, ~3,200 MW of solar power is required for FY2017-18. The TANGEDCO recently signed PPAs with solar project developers to install 1,500 MW of solar in the state.

Mercom previously reported in July 2017 that, the SECI cancelled 950 MW of solar tenders with Plans to re-tender as it renegotiates with States for lower tariff.

And recently Mercom has confirmed that in Jharkhand, DISCOM and developers agreed on renegotiated tariff to develop 685 MW of solar projects.

Image credit: By Yoga Balaji (File:Chennai High Court.jpg) [CC BY-SA 3.0], via Wikimedia Commons