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Solar power companies are unhappy over the ‘first come, first served’ basis for projects in Tamil Nadu.
On September 12, State electricity regulatory commission, TNERC, came up with its solar tariff order, in which it said that the State-owned electricity generation and distribution licensee, Tangedco, will pay ₹7.01 per kWhr of electricity produced by solar power companies who would set up solar projects in the State before September 11, 2015. With the scandal kicked-up by former Telecom Minister A Raja’s ‘first come, first served’ basis for award of telecom licences still fresh in the minds of people, power producers wonder why the TNERC had to adopt that very basis for project awards.
Tangedco will sign power purchase agreements only for such number of megawatts of capacity as it will need to fulfil its mandatory ‘renewable purchase obligation’. But here comes the nub. The award of capacity would be on ‘first come, first served’ basis — with a scope for corruption. This means that a couple of large companies could ‘corner’ projects, leaving the rest disappointed.
The question is, what now happens to the 52 project developers to whom Tangedco had issued ‘letters of intent’ for setting up projects totalling 708 MW in the State. These awardees won the project in a competitive bidding process last year and they have since incurred a costs, including ‘consultation fees’ to Tangedco for studying load flows.
A legal wrangle that came on the heels of the project awards resulted in the Appellate Tribunal for Electricity (APTEL) setting aside the whole bidding process. On Monday, the TNERC too, expectedly, ruled that the bidding process had no legal sanctity. Some developers, however, see a little hope in that part of the order which says that the tariff of ₹7.01 would be applicable for projects commissioned before September 11, 2015.
“There is no way that large projects (such as those might be set up by big companies who apply first) could come up within one year,” notes Dakshinamoorthy Arumugam, a solar entrepreneur, who won a 2-MW order in last year’s bidding.
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