Solar power developers who are interested in putting up projects in Tamil Nadu are worried over the tight deadlines and power evacuation arrangements.

Developers who win rights to put up solar projects in the State in a competitive bidding process have 90 days to achieve financial closure from the date of issue of the letter of intent.

While even this is a very tough deadline to meet, a third of this time will be taken up by the State electricity utility, Tangedco, to do the ‘load flow study’ for the site and give its clearance. The load flow study is needed to ensure transmission stability, determine the suitability of the site and thus impact the very viability of the tariff offered. This is critical in today’s context in Tamil Nadu where wind power projects are often hampered by non-availability of the grid.

Many developers whom Business Line spoke to feel that doing the load flow study after the site is selected is putting the cart before the horse. Instead, Tangedco should do the study for a number of potential sites and make it public so that investors have the choice of putting up their projects there.

Since each sub-station has a limited capacity to take load, Tangedco should first announce how much more load each substation can take, says R.S. Ravi, Director, S.J. Renewables. The company works with a Belgian company called Enfinity, which wants to put up solar projects in the state.

Every single solar power developer that Business Line spoke to, without exception, said that the time given for financial closure was not reasonable.

The least Tangedco could do is to help developers by doing the technical studies for the projects ahead of the bidding process, they said.

In any case, the 90-days time given for tying up funding, according to developers, is infeasible. “It is not going to happen,” says Pasupathy Gopalan, Managing Director, SunEdison, an American company that has put up several projects in Gujarat and Rajasthan. He points out that the National Solar Mission gave six months after signing the power purchase agreement; yet a few developers could not achieve financial closure by the deadline.

(This article was published on November 25, 2012)
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