Telangana signs low-cost solar power deals, TN lags

Telangana has successfully negotiated low-cost solar power deals with companies that are ready to sell power at Rs 5.15 to Rs 5.88 per unit from up units they set up in the state.

Tamil Nadu, by comparison, has signed 25-year agreements with several companies, including the Adani Group, which will sell power at Rs 7.01/unit.

Telangana called for bids to set up solar plants with a total capacity of 2,000MW. Toronto-based SkyPower, which quoted Rs 5.17/unit, won the contract for a 200MW unit.

“The Telangana State Electricity Regulatory Commission (TSERC) divided 2000MW into two bids. The first one called was for 500MW in which it allowed only small players that can set up 15MW units to participate. The tariff was less than Rs 6/unit,” Energy and Infrastructure Practice account manager Anuj Bakshi said. “Big players like Adani, Acme, Mytrah, Suzlon, Sunpower, Renew and Hero participated in the second bid.”

Energy and Infrastructure Practice was the nodal agency for solar power companies which participated in the bid.

The weighted average tariff was Rs 5.82/unit for the Group 1 bids in which smaller players participated and Rs 5.71/unit for the Group 2 bids. The average weighted tariff for both groups worked out to Rs 5.73/unit, Bakshi said. The tariff includes land cost that the companies will have to bear, he said.

The state lost out because it did not choose the competitive model. The Tamil Nadu Electricity Regulatory Authority (TNERC) cancelled the bidding process and took the preferential route. The state is likely to sign contracts for a targeted 3200MW by the end of the year with companies that will charge Rs 7.01/unit for the power they generate for the next 25 years.

Experts say foreign companies are ready to set up solar units in the country and charge relatively low rates for the power they generate. Many states, with the exception of Tamil Nadu, have made the most of the opportunity.

“The cost of setting up of solar power plants has fallen. Between 2011-12 and 2012-13, the cost reduced by 35% to 40%. In the past two years, the cost fell further by 15% to 20%,” financial analyst Bharat Bhushan Agarwal said.

“More foreign companies are evincing interest now that many states have addressed their apprehensions over distribution,” Bakshi said. “Companies from Canada, Mauritius and other countries are participating in bids in states like Madhya Pradesh, Andhra Pradesh and Telangana.”

Source: The Times of India

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