TNERC junks power utility’s plea seeking nod to procure power under PM Kusum scheme

TNERC rejects TNGECL's plea for PM-Kusum Scheme, citing violation of guidelines, prompting revised tender for competitive tariffs.

Tamil Nadu Electricity Regulatory Commission (TNERC) rejected Tamil Nadu Green Energy Corporation Ltd. ‘s (TNGECL) plea seeking nod for power purchase under the PM-Kusum Scheme-Component A.

The regulator noted that TNGECL floated the tender without an upper ceiling tariff and contrary to its earlier order and Union Ministry of New and Renewable Energy (MNRE) guidelines. TNGECL shall issue a revised tender, adhering to MNRE guidelines and the Commission’s directions, to ensure competitive tariffs and better participation, it said.

Under  PM-KUSUM scheme- Component-A, farmers can set-up  Decentralized Ground/ Stilt Mounted Grid Connected Solar or other Renewable Energy based Power Plants on their land up to the capacity.

The renewable power generated from these power-plant is purchased by power distribution companies at the pre-fixed levelized tariff. The power distribution company is eligible to get a performance-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 from the Commercial Operation Date.

TNGECL  floated tender on February 14, 2024 without upper ceiling and sought for nod to enter into long term power purchase agreement for a period of 25 years with four farmers for total capacity of 5 MW at the rate of ₹3.28 per unit, without passing on the performance based incentive given to the power distribution companies, in order to get more competitive tariff.

“From our previous order in 2023 and the MNRE guidelines dated January 17, 2024, it is very clear that if the distribution company wants to go for bidding, it is mandatory that the bidding should have the upper ceiling limit of the solar tariff,” TNERC said.

The solar power rates are coming down on day-to-day basis and the rate of ₹3.28 per unit offered by the bidders seems to be on the higher side. The Uttar Pradesh Electricity Regulatory Commission has adopted the tariff of ₹3.10 per unit under PM-KUSUM scheme component, while Odisha Electricity Regulatory Commission has rejected a plea to review the rate of ₹3.08 per unit.  since the competitive bidding price for solar is still less than ₹3 per unit, TNERC said.