Friday, November 23, 2012

Tamil Nadu Solar Policy Bidding for 1000 MW –TANGEDCO Consultation Meeting

A fairly hectic consultation meeting happened yesterday at TANGEDCO (TNEB) yday for bidding for 1000 MW of solar projects in TN.
Crowd was amazing, something on lines one would have expected for a top-line movie premiere- so much that the folks there had to arrange for two sessions instead of one, as originally planned
(Talking of movies, there was every likelihood that the TANGEDCO chairman would have been mobbed much more than a Kollywood superstar if one were present there. The TNEB HQ itself looked like a movie theater, and in a rather cinematic coincidence I even met a top honcho from the Satyam Cinemas attending the meeting!).
Key takeaways
1. Tender for bidding for 1000 MW will be out in a week
2. 360 days from the time of tender , they are looking at 1000 MW being operational.
3. Minimum 1 MW, no upper limit (NO UPPER LIMIT? Yep, that’s what the TANGEDCO CMD re-re-repeated)
4. 20 year PPA (and not 25?)
5. A rather interesting way to bid. You bid for a price that will be increased by 5% every (compounded) year until the 10th year. The price will remain the same as the 10th year price for years 11-20.
Everyone bids, and based on the lowest bid price, TANGEDCO will fix a common price for all allottees.
(A bit confusing over here on what that actual price will be – will it be the lowest price or an average? Also, the exact process of allotment is not clear, will it be a 2-step process, if TANGEDCO fixes the price based on first bids? Isn’t there a chance that I would like to back out if the price TANGEDCO fixes after the bids were submitted is lower than what I had bid for and I don’t wish to go lower? How does this process accommodate this?)
6. Payment security through LC (this should bring a sigh of relief from most folks)
7. TANGEDCO will ensure that evacuation facilities are not a problem – in fact, he read out the additional capacities available in each TN district and it came to 1110 MW, so I presume that is the math they are working with. (Those who wish to know the evacuation capacities available in the various districts can get these data from Chief Engineer, Non Conventional Sources, TANGEDCO)
8. Minimum net worth for bidder – 1 Cr/MW
9. Identifying land and putting up a dedicated feeder line are the responsibilities of the developer. TANGEDCO can put up the dedicated line, but the cost is to the developer.
10. There will be a pre-bid meeting soon after the tender is released.
OK, the above were the salient points.
Other points of interest:
  • Release of Tender Bid Document – Day 0 – Time A (0 from start)
  • Submission of Bids – Day 30 – Time B (30 from start)
  • Qualification of Eligible Bidders and LoI – Time C = Time B + 30 days  (60 from start)
  • Completion of Load Flow Studies – Time D = Time C + 30 (90 days from start)
  • Financial Closure – Time E = Time D + 30 (120 days from start, 60 days from LoI)
  • Project Completion – Time F = Time E + 240 (360 days from start, so you get 8 months for implementation)
SPO Solar Tariff and Its Relation to Bid Price
What will be the solar tariff for all those wishing to buy solar power from TANGEDCO to meet their SPO? This price will be determined based on the final contract price offered by TANGEDCO (which in turn will depend on the bid prices), and to this will be added transmission charges and other applicable costs to arrive at a final solar tariff.
Division of responsibilities between TANGEDCO & TEDA:
TANGEDCO will do the following:
  • Signing of PPA (and buying and paying for the power)
  • Letter of Credit
  • Responsible for ensuring evacuation facilities
  • Will also undertake load flow study
Rest will be taken care of TEDA.
Some key questions/concerns I and some others had in mind:
  • Lack of upper limit – doesn’t sound like a great idea – seems to go against the spirit of ensuring that a large number of aspirants participate
  • One price for all – this is different from the reverse bidding seen in other states, where I get the price I bid for. Thus, not sure how exactly how the process will work.
Other than these, the powers-that-be appear to have thought things out quite well. It was nice to see they addressing the key pain points very well, viz
  • Payment security
  • Lack of evacuation
  • Transparency of the entire process
But they surely had not thought out one point – the crowd that would gather for this. They had estimated 100, it would have been more like 400. Sign of things to come?
Wish to comment or have questions?
Do you have questions on this? Please drop these in the comments. I will make sure I will consolidate them and send it to TANGEDCO & TEDA. No, I don’t work for TEDA or TANGEDCO, but I presume they might prefer if someone consolidates and sends all the questions. 

1 comment:

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