Energy Watchdog, an NGO, has filed a petition against Tamil Nadu Electricity Regulatory Commission (TNERC) and Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for extending the control period for solar power tariff of Rs.7.01 (~$0.1044)/kWh by one year.

The court filing says that the TNERC extended the control period of its solar power tariff ignoring the revised, downward benchmark capital cost of Rs.5.68 (~$0.0849)/kWh for solar power as issued by the Central Electricity Regulatory Commission (CERC).

According to the filing, 31 Energy Purchase Agreements (EPAs) valid over a 25-year period were signed by TANGEDCO with 23 companies on a nomination basis at a tariff of Rs.7.01 (~$0.1044)/kWh for purchase of 1,181 MW solar power.

According to sources at TANGEDCO, the current tariff levels for solar power elsewhere in the country are below Rs.5 (~$0.0744)/kWh whereas the Rs.7.01 (~$0.1044)/kWh at which the state buys solar power is much higher comparatively and adversely affects the consumers as they have to pay more, hence the petition.

According to sources at Adani, which is one of the largest solar power generators in the state, it will result in heavy loss for the company if the tariff is decreased from the original Rs.7.01 (~$0.1044)/kWh for which they have signed 25-year PPAs. Adani said that it is not the developers’ fault and TANGEDCO officials knew that the control period for the tariff was valid only for projects commissioned on or before March 31, 2016.

According to developers, Tamil Nadu has opted to buy power from exchanges at a cheaper price and curtail the power from solar projects that it is required to purchase at Rs.7.01 (~$0.1044)/kWh, in some cases resulting in revenue losses for solar project developers. “Any changes to tariffs retroactively will kill the solar industry in a state which is already considered risky,” said Raj Prabhu, CEO of Mercom Capital Group. “The petitioner also seems to think that solar project costs are the same across the country and makes comparisons to project costs from different states, policies, solar parks and offtakers to make their case. In reality, costs and risks vary from state to state.”

Adani Green Energy, Siddartha Energy, Kamuthi Solar Power, Ramnad Solar Power, special purpose vehicles (SPVs) floated under the umbrella of SunEdison India, and RT Renewable Energy India are a few of the major developers in Tamil Nadu who will be adversely affected if the solar power tariff is changed according to CERC guidelines.

Image credit: By Vinaykumar8687 (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons