TANGEDCO To Add 3 MW Solar Power Under PM-KUSUM Scheme

The Tamil Nadu Electricity Regulatory Commission(TNERC) has allowed the Tamil Nadu Generation and Distribution Corporation Ltd (Tangedco) to procure solar power with a combined capacity of 3 MW generated by two farmers in the state. The solar power will be purchased at a tariff of Rs 2.99 per unit, under Component – A of the PM-KUSUM Scheme. Tangedco can now issue a letter of award to the two bidding farmers and also sign a power purchase agreement (PPA) for a period of 25 years. Tangedco will also be making payment to the two farmers for the gross generation of the solar power plants.

The ‘Component-A’ of the solar power scheme says that solar power generation units of capacity 500 kW to 2 MW are allowed to be set up by farmers, group of farmers, cooperatives, panchayats, Farmer Producer Organisations, Water User Associations etc. on land which is barren or fallow. These plants are to be srt up within a 5  km radius of the nearest sub station, to keep it local, and reduce transmission losses and costs.

The solar power produced will be purchased by the local distribution company. The tariff is pre-fixed. However, that hasn’t really helped in pushing uptake, as heavy state level involvement has meant a slow laborious pathway to progress in most states.  Component B, which is off grid solar pumps, is the one which had a good run until recently.

The Central Government is already offering a procurement based incentive of Rs 0.40 per unit of power or ₹6.6 lakh per MW of capacity installed whichever is less, when the solar power is purchased from the farmers under Component A of PM-KUSUM Scheme. This benefit from the Central Government is available for five years to the DISCOM.

Earlier, the DISCOM had issued a tender for solar power purchase of 1 MW to 2 MW making upto 500 MW where the upper ceiling tariff of Rs 3 per unit was fixed. The company selected the bids of T. Palani from Arcot district for 2 MW and K.Sathyabal from Dindigul East Taluk for 1 MW capacity at a tariff of Rs 2.99 per unit. The bidders refused to lower the tariff further considering an increase in duties on the solar panels and other solar equipment which make up about 70 per cent the entire investment. The duty rose from 5per cent to 12 per cent.

Tangedco says that the tariff offered by the two farmers is still lower than tariffs in many states where the tariff for solar power is hovering over Rs. 3 per unit. With the incentives provided by the Central Government, the tariff rate for Tangedco will stand at Rs 2.59 per unit for the first five years from the date of commercial operation of the solar power installations.

Last month, officials from Tangedco said that the power distribution company was planning to develop 20,000 MW of solar power projects in Tamil Nadu by 2030. On the other hand, Tamil Nadu Energy Development Agency (TEDA), is looking to install solar power panels on the government buildings of the state whose tender could be released in the first week of May.