Solar companies protest Tamil Nadu’s move to not pay for excess power

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n a memorandum to Tangedco, the National Solar Energy Federation of India (NSEFI) has protested its decision not to pay for the excess power generated by any solar plant.

BENGALURU: Solar developers are up in arms over Tamil Nadu’s decision not to pay for power they produce by achieving higher efficiencies, which they claim has already cost them over Rs 100 crore.

In a memorandum to the Tamil Nadu Generation and Distribution Co (Tangedco), the National Solar Energy Federation of India (NSEFI) has protested its decision not to pay for the excess power generated by any solar plant which exceeds a capacity utilisation factor (CUF) of 19%.

CUF is the ratio of the actual output from a solar plant to the maximum possible output from it under ideal conditions. Most solar plants in India achieve an average CUF of 15-19%, depending on the quality of the plant and the strength of the solar radiation, but have on occasions, especially in sunshine-rich states like Rajasthan, crossed 20%.

Tangedco officials maintain their decision is based on two orders passed by the state’s power regulator, the Tamil Nadu Electricity Regulatory Commission (TNERC), relating to solar tariffs. “The limit prescribed by TNERC for solar tariff is 19%,” said M Sai Kumar, chairman and managing director, Tangedco. “Developers who want relief can only get it from TNERC.”

Tamil Nadu began conducting solar auctions only in mid-2016 before which solar tariffs were fixed by TNERC. The first TNERC order, in September 2014, set the tariff at Rs 7.01 per unit, while the second, in March 2016, lowered it to Rs 5.10 per unit.

All the 1600 MW odd of solar projects currently supplying power to Tangedco do so at tariffs fixed by TNERC, since the projects won through auctions have yet to be completed. They are paid either Rs 7.01 per unit or Rs 5.10 per unit, depending on whether they were commissioned before March 2016 or after.

While passing its orders, TNERC had also set down the parameters it used to arrive at the tariff, and assigned estimated values to each parameter. These included capital cost, operation and maintenance cost, interest on working capital, depreciation and many more, including the CUF expected. In both the orders, it estimated the CUF at 19%. Tangedco has interpreted this to mean that power produced in excess of a CUF of 19% will not be paid for.

Solar developers in the state see it differently. “In actual practice, some parameters are bound to increase while others may decrease,” the memorandum says. “When the ultimate normative tariff, as determined by TNERC, is a complex interplay of various parameters, Tangedco cannot pick and choose one parameter and try to reach to a conclusion one way or the other.”

Source: Energy World from The Economic Times

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