Tamil Nadu Discom Gets Nod For 500 MW Projects Under Component A of PMKUSUM

In its order based on a hearing held on December 28, the Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the Tamil Nadu Generation and Distribution Corporation’s (TANGEDCO) proposal to procure upto 500 MW of solar power from projects with capacity in the range of 1 MW to 2 MW under Component A of the PM-KUSUM program. If the capacity under Component A exceeds the sanction of MNRE, approval from MNRE may be obtained for additional capacities.

The commission had earlier set the ceiling tariff at Rs 3 /kWh for procurement under the program. Even as MNRE allows for capacities between 500 KW to 2 MW, the TNERC has gone with a capacity category of 1 MW to 2 MW. MNRE has already extended the deadline for project allotment under PMKUSUM Component A to March 31, 2022. Maharashtra has also pushed for a 500 MW tender on December 29.

Component A of the PM-KUSUM program has been in focus this year, with many states finally moving to add capacities here, as it is a grid connected component of the scheme, unlike Component B which is off grid and exclusively used to power solar pumps. the target here countrywide is 10,000 MW of projects upto 2 MW size, but progress has been tardy.

In 2018, the TNERC had recommended that TANGEDCO procure solar power in three stages of 500 MW each , as it was considered too ambitious to go for the 1500 MW procurement in one shot. As the capacity and generation under the scheme will also count towards the discom’s RPO obligations, TANGEDCO should also have been keen. But response was predictably poor, thanks to multiple issues and conditions with the first 500 MW tender, so much so that the tender was eventually cancelled.

This time, TANGEDCO sought certain deviations which it believes will help make for a successful tender.

The key deviations include interconnection through both new and existing transmission lines for projects. If the capacity under Component A exceeds the sanction of MNRE, approval
from MNRE may be obtained for additional capacities.

Other deviations include late payment surcharge at 1% instead of 1.5% specified by MNRE, waiver of the letter of credit mechanism of payment security, and timelines for payment of monthly bills.

Most states have rates ranging between Rs 2.70 to Rs 3.50 for procurement under Component A of the scheme.