: Solar power curtailment in Tamil Nadu is mostly due to Tamil Nadu Generation and Distribution Corporation (TANGEDCO) opting to buy cheaper power from the exchanges at Rs 3/kwh rather than paying Rs 7.01/kwh to independent producers/developers with whom it has signed agreements, according to a report by Mercom Capital Group. Curtailment refers to energy produced that is not taken up by the grid.
The average market clearing price in July was just Rs. 2.16 on the Indian Energy Exchange, a 7 per cent drop month-over-month, the research firm said in its India Solar Quarterly Market Update.
Spike in generation
The increase in renewable energy addition has caused some solar power curtailment issues in Rajasthan and Tamil Nadu where discoms (distribution companies) have flouted the ‘must run’ status of solar power, thereby negatively affecting developers, as per the report.
Mercom said the problem was more pronounced in Tamil Nadu, especially in high wind energy density areas when wind and solar generation peak simultaneously.
Earlier this month, The Tamil Nadu Electricity Regulatory Commission had asked TANGEDCO to technically justify why it had asked solar power plants to back down from the grid, in a petition filed by the National Solar Energy Federation of India.
A senior official from TANGEDCO said that cheaper power gets picked up first. “There is no must-run status to solar as in the case of wind. The utility is buying almost 3,500 MW of cheap wind power.
“So with renewables itself, we have this system of picking up the cheapest,” he added.
In Tamil Nadu, solar projects commissioned before March 2016 has a tariff of Rs 7.01 per kwh, while projects commissioned after April 2016 has a tariff of Rs. 5.10 per kwh.
Mercom also said any solar project development in Tamil Nadu was at the developer’s own risk. “Unless things change drastically, we advise investors to stay away from the State,” it said.
Tangedco is also gearing up to launch a tender for procuring 500 MW of solar power through competitive bidding.
Asked whether the current curtailment issue would hurt the tender process, the TANGEDCO official said cheaper power gets better evacuation.
“Solar power at Rs. 5.10 is now getting priority evacuation ahead of the power that costs Rs. 7.01 a unit.”
TANGEDCO has managed to buy power at a significantly lower rate of Rs. 3/kwh[The Hindu]