Solar power firms get pay assurance

Last Updated: Fri, Nov 23, 2012 20:40 hrs

Tamil Nadu has promised the solar power producers that it will pay the dues to them. The promise comes at a time the state electricity board owes a little over '1,000 crore to the wind energy sector. Today’s promise comes against the backdrop of Tamil Nadu’s plan to add around 3,000 Mw of solar power in three years.

While addressing the prospective bidders consultation meeting for 1,000 Mw state distribution company Tangedco’s Managing Director K Gnanadesikan said, the main part of the project is that the payment is guaranteed and there will be a payment support mechanism as a letter of credit and the bid will be on the basis of a rate contract. It may be noted, Tamil Nadu has directed Tangedco to procure 1,000 Mw this year which will be supplied to high tension and LT industrial and commercial establishments.

The bid document will be issued within 10 days. The company, participating in the bid should have a minimum of '1 crore net worth per Mw.

The process will be decentralised so that anywhere in the state, the plant could be set up. “The government will not help with land acquisition for the project and there won’t be any subsidy for the 1,000 Mw and we will enter into a 20-year power purchase agreement,” said Gnanadesikan.

He added, while the purchase of power will commence in 2013-14, the distribution company will increase price 5 per cent every year up to 10 years.

While welcoming the government’s policy, which stipulates a target of 3,000 Mw capacity to be established by 2015-end, some of the solar majors have said the rate contract could have an impact on the quality of power produced.

They also said, evacuation is one of the key issues which the state government need to addressed, said C R Vijaya Kumar, EVP, MRO-TEK Ltd. For evacuation state electricity board will use the existing infrastructures, said Gnanadesikan.

Other industry representatives have also said, the government’s decision not to intervene in land acquisition will be another bottleneck and also no support from the Government on financial.

It may be noted, the state government has mandated for the HT industrial and commercial consumers to use solar power, under solar purchase obligation (SPO), which has been fixed as three per cent for 2013 and six per cent for 2014 out of their total energy consumption.

To meet this target the state government has been inviting solar power producers to set up plant in the state.


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