The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has announced a tender for 1,500 MW of solar in Tamil Nadu through reverse auction. Developers can bid for a minimum capacity of 1 MW and a maximum capacity of up to 500 MW. TANGEDCO has set the upper tariff limit at Rs.4 (~$0.062)/kWh.

According to the tender document, the last date of submission of bids is June 15, 2017. TANGEDCO is the off-taker for the projects and the developers will sign power purchase agreements at a fixed tariff for a period of 25 years.

The scope of work includes establishment, operation and maintenance of the project along with the erection of the power evacuation line, connecting the project to the substation. TANGEDCO will provide the transmission system to facilitate evacuation of power from the projects.

In case the developer faces grid unavailability for more than 175 hours in a financial year, corresponding to this generation loss, the excess generation by the project in the succeeding financial years will be procured by TANGEDCO at the PPA tariff, to offset any loss.

The project completion timeframe from the date of signing the PPA is 12 months for capacities up to 50 MW and 24 months for capacities more than 50 MW. The 24-month project completion time is one of the longest we have seen in India and could attract some really low bids.

However, TANGEDCO does not have a good reputation with payment delays and curtailment issues, which raises the risk level for developers. If project commissioning is delayed beyond five months, in addition to 100 percent encashment of the Performance Bank Guarantee, the developer will pay TANGEDCO a sum of Rs.10,000 (~$155.53)/MW per day of the delay.

TANGEDCO tendered 500 MW of solar and received bids to develop just 117 MW in February . TANGEDCO had tendered another 500 MW of solar in November last year to meet its renewable purchase obligation (RPO) and received technical bids to develop only 300 MW of solar.

Mercom had previously reported that TANGEDCO had plans to tender 1,500 MW of solar to meet its renewable purchase obligation. TANGEDCO had filed a petition with the Tamil Nadu Electricity Regulatory Commission (TNERC) to set Rs.4 (~$0.062)/kWh as upper price limit for this tender.