Tamil Nadu

Regulator rejects Tangedco’s plea

‘Move favouring NLCIL will hurt utility’

Tamil Nadu Electricity Regulatory Commission (TNERC) has rejected Tamil Nadu Generation and Distribution Corporation’s (Tangedco) plea to allot wind energy capacity over and above the auction quantum of 500 MW to NLC India Ltd.

The regulator said such a move would not only curtail the other wind energy developers the benefit of participating in the tender if a fresh tender was floated, but would also cause financial loss to the utility as the tariff for wind energy had fallen steeply.

Last year, Tangedco floated a tender to procure 500 MW of wind energy through competitive bidding process (where lowest bidder is chosen as winner). In the auction, Regen Powertech bid for 200 MW, Leap Green Energy bid for 250 MW and NLC India Ltd. bid for entire 500 MW.

However, Regen Powertech was the lowest bidder at ₹3.42 per unit. Tangedco had asked other bidders to match the lowest bid. Leap Green Energy agreed to match the bid, while NLC India Ltd. said it would match the lowest price provided it was allotted the 500 MW capacity, instead of the remaining 50 MW.

Tangedco went a ahead and finalised the bids for total capacity of 450 MW from Regen and Leap Green at ₹3.42 per unit, which was approved by the TNERC.

Tangedco further sought approval of allotment of additional 175 MW capacity (including the 50 MW remaining in the tender) or 25% over and above the tendered capacity as per norms.

TNERC noted that post the Tangedco tender wind tariffs had fallen further and cited that in Solar Corporation of India’s third wind auction of 2000 MW in February 2018, the successful bidders quoted at ₹2.44 per unit. The earlier second auction floated by the Solar Corporation of India for 1,000 MW held in October 2017 saw the winning bid price of ₹2.64 per unit.

It also ruled that the State utility cannot reopen/restart the tender which had been approved and it should be construed as closed for all purposes.

The Commission also pointed out that it had recently approved procurement of 1,500 MW of wind power through competitive bidding with a ceiling price of ₹2.65 per unit and therefore Tangedco’s proposal to procure 175 MW at a higher rate cannot be permitted. Tangedco can go for fresh tender and alternatively NLC India Ltd. may participate in the tender proposed to be floated for 1,500 MW of wind power.

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Printable version | Apr 8, 2020 11:41:23 AM | https://www.thehindu.com/news/national/tamil-nadu/regulator-rejects-tangedcos-plea/article24157006.ece

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