The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved tariffs in the range of ₹3.02 (~$0.0315)/kWh to ₹3.09 (~$0.0323)/kWh for the procurement of 12 MW of solar power under Component-A of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program.

The Commission also approved the issuance of Letters of Award (LoAs) by Tamil Nadu Green Energy Corporation (TNGECL) and the execution of power purchase agreements (PPAs) by Tamil Nadu Power Distribution Corporation (TNPDCL) with the seven successful bidders for a period of 25 years.

However, it rejected the petitioners’ request to make payment based on gross generation. Instead, the Commission directed that payment for power procured must be based on net energy delivered after accounting for applicable line losses.

Background

TNGECL and TNPDCL had filed the petition seeking approval to adopt tariffs offered by seven farmer-bidders for proposed solar power projects with a combined capacity of 12 MW under Component A of the PM-KUSUM program.

Earlier, TNGECL had been permitted to float a tender to procure 420 MW of solar power under PM-KUSUM Component-A.

Sixteen bidders participated in the tender. Their bids were opened in February this year, and after negotiation, four bidders were placed at ₹3.02 (~$0.0315)/kWh and three at ₹3.09 (~$0.0323)/kWh.

The petitioners argued that the discovered rates were reasonable because they were below the ceiling tariff of ₹3.10 (~$0.0324)/kWh. They also submitted that the bidders were from different geographical locations and substations, and that accepting the rates would encourage distribution-level solarization and improve farmers’ livelihoods.

They requested that payment be made for gross generation if the solar project is interconnected to existing 11 kV or 22 kV feeders, and for generation recorded at the substation end if connected to a substation.

Commission’s Analysis

The Commission noted that TNGECL had floated the tender in line with the Commission’s earlier approval and that the procurement was intended for renewable power generators with a capacity of 1-2 MW.

The Commission found that the tender process was consistent with the Ministry of New and Renewable Energy’s (MNRE) guidelines, which envisage decentralized renewable energy projects near substations to facilitate distributed renewable generation.

On bid evaluation, the Commission observed that the disqualification of certain bidders was in accordance with the approved tender conditions.

The Commission concluded that the discovered tariffs were below the ceiling tariff and were determined through a transparent bidding process.

However, on the issue of gross generation payment, the Commission directed payment based on net energy delivered after accounting for line losses since an earlier order had already approved the deduction of applicable line losses.

It also directed that solar modules used in the projects conform to MNRE’s Approved List of Models and Manufacturers, and that evacuation infrastructure and approvals be established on time.

In March this year, TNERC approved a tariff of ₹4.47 (~$0.048)/kWh for two 15 MW solar projects integrated with 45 MWh battery energy storage systems in the Karur and Thiruvarur districts.

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