TNERC Approves Rs 2.91 Tariff for Procurement of 441 MW Wind Power

TNERC has approved a tariff rate of Rs 2.91/kWh for TANGEDCO to procure nearly 441 MW of wind power through SECI for a period of 25 years.

The Tamil Nadu Electricity Regulatory Commission (TNERC) in its latest order has approved a tariff rate of Rs 2.91/kWh for the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) to procure nearly 441 MW (440.64 MW) of wind power through the Solar Energy Corporation of India (SECI) for a period of 25 years.

TANGEDCO had filed a petition with the commission, seeking permission for it t procure 440.64 MW of wind power from the prospective wind power generators selected through the Tranche-VIII tender floated by SECI for 25 years at the rate of Rs.2.84 (+ Rs.0.07 as trading margin) to meet its RPO requirement from the year 2021-22 and to achieve target fixed by the Ministry of Power (MoP) and the Ministry of New and Renewable Energy (MNRE).

In its submissions, TANGEDCO has cited that the MoP’s target of 175 GW of renewable energy power by 2022, of which wind power is to constitute 60 GW. Of this, TANGEDCO is expected to contribute 3.5 GW. It further stated that it expects to achieve about 2.1 GW of this target by 2021-2022. For the rest, the Discom said it has already floated a tender to procure 500 MW of wind power at a tariff of Rs3.46/kWh, of which 450 MW has been finalised, with the power purchase agreements (PPA) signed.

However, TANGEDCO explained that it had had setbacks with this project as one of the bidders has only commissioned 49.5 MW of its promised 200 MW while the other successful bidder has not started work on its project at all. Both bidders have sought for a timeline extension from the state commission. The projects had to be commissioned by March 2019, according to the PPA.

Given the circumstances, the board members of the Discom approved a proposal to procure 440.64 MW of wind power through SECI’s tender for Rs 2.91/kWh [Rs 2.84 + Rs 0.07 trading margin].

In its order, the commission stated that after having carefully considered the above submissions made by the petitioners, it approves the present proposal of procurement of 440.64 MW of wind power through Solar Energy Corporation of India for 25 years at the rate of Rs 2.84 + (Rs 0.07 as trading margin) totalling to Rs 2.91 per unit to meet TANGEDCO’s non-solar RPO requirement from the year 2021-22.

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Recently, the commission has also issued a consultive paper discussing the approach for procurement of wind power by the Distribution Licensee (Discoms) and on related issues of open access. As per the paper, the commission has observed that tariffs obtained by state agencies and national agencies like the Solar Energy Corporation of India (SECI), in the biddings have been competitive and are reflective of the market. And has thus proposed that the procurement of wind power by the Discoms, for compliance of RPO requirement, should be done through the competitive bidding route under section 63 of the Electricity Act of 2003.