The Solar Energy Society of India has filed a case against the Tamil Nadu’s State-owned electricity generation and distribution company, Tangedco, over the recently closed tender for the purchase of solar power.
Tangedco recently floated a tender which called for solar power developers to (set up solar power plants and) sell solar power to Tangedco under 20-year power purchase agreements, at rates arrived at by the competitive bidding process. The bids closed on January 4, and where Tangedco had wanted to buy power from 1,000 MW of solar capacity, the response was only for 499 MW of capacity.
The Director-General of the Society, J.S. Jawa, confirmed to Business Line today that it has filed a case with the High Court of Madras, on the grounds that the tender process was not fair.
The details of the case are not yet clear, but the solar industry has, in general, expressed its unhappiness over several aspects of the TN solar power purchase tender. For example, the Solar Independent Power Producers Association, has complained that the methodology of selection of the winning bidders was “seriously flawed.” Since different bidders bid for different capacities, they cannot be asked to match the price of the least bidder, it said. “How can a bidder of 1 MW capacity accept the tariff negotiated by a developer of 100 MW? Conversely, does a price negotiated by L-1 bidder, of say, 1 MW or 5 MW, become the benchmark for the remaining 995 MW?”
The association, in a letter to the Tamil Nadu Electricity Regulatory Commission, took exception to the draft power purchase agreement being “subject to TNERC approval”. “It is unclear as to when TNERC will approve the PPA and what material changes are made to the agreement post-bidding and the issue of the letter of intent?”
It is unclear as to how many days TNERC would take to provide such approval. “This is very important because without TNERC approval achieving financial closure would be next to impossible. Also the draft PPA does not provide any recourse to solar developers on account of delay in approval by TNERC,” the association said.
It also said that allowing individuals, proprietary concerns and partnership firms to bid on the basis of chartered accountant’s certificate for meeting the net worth conditions was “prone to manipulation.”
Source: Business Line