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R. Balaji

Chennai, Aug. 29

No bidders responded to the global tender called by the Tamil Nadu Energy Development Agency (TEDA) for proposals to set up solar thermal power generation projects in the State.

The deadline for submitting the bids ended today.

TEDA, the State Government agency to promote use of renewable energy, had invited project proposals for grid connected solar thermal power generation. These were to be supported through fiscal incentives by the Union Ministry of New and Renewable Energy (MNRE), to promote grid interactive solar power generation.

The Ministry will provide a generation-based incentive of Rs 12 a kWh for solar photovoltaic projects and Rs 10 a kWh for solar thermal power generation projects. This would be in addition to the tariff fixed by the State. The Ministry hopes to support 50 MW of solar power projects – photovoltaic and solar thermal – with 10 MW in each State.

According to industry sources, the reasons for the lack of investor interest could be attributed to the conditions of the Central Government’s support and the nascent stage of the technology for solar thermal projects.

According to sources in the know, potential investors had asked for more time to submit their bids.

The early deadline puts them on a weaker footing in bargaining with technology providers. But the Central Government support would only be available to those projects that are commissioned before December 31, 2009.

Also, the MNRE support has been announced for 10 years but the project life is double that long – about 20-25 years.

This makes for some uncertainty on the status of these costly projects after the 10-year period. A MW of solar powered generation capacity would call for investments of Rs 16-25 crore against Rs 5-6 crore for conventional power or wind power.

If the Centre provides some long term certainty on support, there would be more response from investors, the sources said.

TEDA had received better response to the bids it had called for setting up grid connected solar photovoltaic power projects for which three project proposals were received on Wednesday.

Another concern is that in Tamil Nadu, the State Electricity Regulatory Commission has fixed an interim tariff of Rs 3.15 a kWh for solar power. The commission had set an interim tariff to pave the way for proposed projects to avail of the Central Government incentive, which gives priority to those States that have announced a tariff for solar power. But because the tariff is an interim one, there are concerns on the final tariff and whether the viability would be impacted, the sources said.

On the technology constraint for solar thermal projects, the sources said in the few instances that solar thermal has been used it has been on a massive scale.

It ranges around 300 MW in Australia, 150-200 MW in the US and around 50 MW in Spain. But the MNRE is looking at projects in the 1-5 MW range.

More Stories on : Non-conventional Energy | Tamil Nadu

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