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The Tamil Nadu solar bid is “seriously flawed”, says the Solar Independent Power Producers Association (SIPPA).
In a petition sent just days before the last date for submission of bids (January 4), the Association requested the Tamil Nadu Electricity Regulatory Commission to “instruct” the Tamil Nadu’s state-owned electricity generation and distribution company, Tangedco, “to conduct a transparent and fair bidding process.”
The issue pertains to a tender floated by Tangedco which called for solar power developers to (set up solar power plants and) sell solar power to Tangedco under a 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.
“How can a bidder of 1 MW capacity accept the tariff negotiated by a developer of 100 MW?” asks SIPPA, in its petition to TNERC. “Conversely, does a price negotiated by L-1 bidder of, say, 1 MW or 5 MW, become benchmark for the remaining 995 MW?”
It said that the process “does not seem logical” because it “rather encourages the bidders to quote a price which shall not be L-1 in any case. This is because, the 1,000 MW capacity will be spread at least over 100 to 150 developers and all except the L-1 bidder will have the option to accept the benchmark price or exit the process safely by getting their earnest money deposit back. “So why should any one bidder (aim to) be L-1 and become the only one to lose his EMD?”
SIPPA further said that the time given to complete the projects–10 months from the date of the issue of the letter of intent–is “totally discomforting”. It noted that the Standard Bidding Guidelines issued by Government of India for renewable energy projects gave 24 months for projects above 10 MW.
SIPPA also takes exception to Tangedco allowing individuals, proprietary concerns and partnership firms to meet the eligibility conditions by getting a chartered accountant’s certificate to prove networth. “The bidding is heavily prone to manipulation,” the Association said.
A further objection to the process was in the power purchase agreement and would have got to be approved by TNERC. “It is unclear as to when TNERC will approve the PPA, and what if material changes are made to the PPA post-bidding and the issue of the LoI?” asked SIPPA.
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