CHENNAI: Tamil Nadu Generation and Distribution Corporation Ltd (Tangedco) has got regulatory nod to procure solar power with combined capacity of 3 MW from two farmers at a tariff of ₹2.99 per unit, under Component – A of the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyaan (PM-KUSUM) Scheme.
Under component-A of PM-Kusum Scheme, renewable energy based power plants of capacity 500 kW to 2 MW can be setup by individual farmers/ group of farmers/ cooperatives/ panchayats/ Farmer Producer Organisations (FPO)/Water User associations (WUA) on barren/fallow land.
The renewable energy power project will be installed within a five km radius of the sub-stations in order to avoid high cost of sub-transmission lines and to reduce transmission losses. The power generated will be purchased by the local distribution company at a pre-fixed tariff.
For buying power from farmers/developers under Component A of the scheme, Union Ministry of New and Renewable Energy (MNRE) provides a procurement based incentive of ₹0.40 per unit or ₹6.6 lakh per MW of capacity installed whichever is less/ for a period of five years to the distribution company.
Earlier, Tangedco had floated a tender to buy solar power of 1 MW to 2 MW up to a maxmium capacity of 500 MW under a reserve bidding with an upper ceiling of ₹3 per unit.
Tangedco said it had selected bids of T. Palani, Ladavaram, Arcot for 2 MW capacity and K.Sathyabal, Pallapatty, Dindigul East Taluk for 1 MW capacity at a tariff of ₹2.99 per unit each.
It also said both the successful bidders refused to reduce the tariff further and one the reasons cited by them was an increase in duty charges for solar panels and solar equipments from 5% to 12%, which account for 70% of the total investment.
Tangedco also said the rate quoted by the two farmers is found to be lower than rates in most of the States which is over ₹3 per unit. With the MNRE incentive, the tariff rate narrows down to ₹2.59 per unit for the first five years from date of commercial operation rate and results in substantial savings, it added. The utility said MNRE in its order dated 13-01-2021 has allocated 75 MW for implementation of KUSUM-Component A scheme for Tamil Nadu, which is valid for a period of 24 months from the date of issue.
The Tamil Nadu Electricity Regulatory Commission gave a nod to Tangedco to issue a letter of award to the two bidders and subsequent execution of power purchase agreement for a period of 25 years. It also directed Tangedco to make payment for the gross generation of the solar power plants of the two farmers.