India: Lukewarm response to Tamil Nadu's 1000MW tender

07. January 2013 | Industry & Suppliers, Markets & Trends, Top News | By:  Shamsiah Ali-Oettinger

The Tamil Nadu Generation and Distribution Limited (TANGEDCO) has received a total of 92 applications for 104 projects totaling 499 MW after bids opened last week. The target has been set at 1000MW of solar projects for this year.

Barely half of the proposed 1000 MW has been covered in the bids in Tamil Nadu.

Founder and Director of RESolve Energy Consultants Madhavan Nampoothiri stated that there were concerns that the Tamil Nadu solar policy implementation was moving too fast, but hope was still present. However, after the bidding was opened, only 499MW were filled.

It was reported in the local media in India that the pre-bid meeting held in mid-December did not clear all the doubts that potential developers had. The PPA (Power Purchase Agreement) was even quoted to be "not bankable". Payment security has been a big issue and grid concerns also pulled back the willingness of developers. Local media "The Hindu Business Line" reported that grid concerns rose as a result of wind power generators being unable to sell their power due to grid unavailability. These cast more shadows on the possible successful solar project development in the state. This doubt has been now potentially reflected in the number of applications.

Nampoothiri stated,"The question is, was the bidding successful or not? Is the glass half empty or half full? I am sure the authorities will be disappointed, but do they have a backup option to achieve the 1000MW target? Another question is, what will be the L1 and how many of the bidders choose not to accept the L1 and drop out?"

According to Nampoothiri, Sun Edison submitted 50MW in 4 separate bids. Even though there was no upper limit, majority of the projects, 83 namely, were for 5MW and less. Ramanathapuram in the southeast of Tamil Nadu saw the highest interest with 123MW. More details can be found in Nampoothiri's blog.

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