An air of concern had started to enter the Tamil Nadu solar industry, after news last month that a TANGEDCO 500 MW solar tender had only received 117 MW of bids. However, state-owned NLC has now itself initiated a fresh solar tender for 500 MW of PV within the state, according to Mercom Capital.

The tender is for grid-connected solar projects, with a minimum size of 50 MW. The projects can be spread across a maximum of 10 locations across the state, with EPC contracts to be selected through the bidding process. Mercom stated that the work includes a large scope of duties, including the procurement of land, design, engineering, manufacturing, inspection, supply, insurance, transport, erection, storage, testing and commissioning.

Once a Letter of Award is issued, the projects will be commissioned within one-year, while the power purchase agreements (PPAs) for the energy generated at the sites will be signed with the Tamil Nadu Generation and Distribution Corporation (TANGEDCO).

TANGEDCO itself organized a 500 MW solar tender earlier in the year, but so far it has been widely undersubscribed, with only 117 MW of bids entering into the tender. The NLC tender is expected to attract more interest than the TANGECO tender, as the tender is with a public-sector unit.

One of the likely reasons for the lack of interest in the TANGEDCO tender is the reputation that it has been getting for making late payments. Mercom Capital Group CEO Raj Prabhu said that TANGEDCO has developed an unwanted reputation as a late-payer of tariffs, and is also prone to curtailing solar power in favor of cheaper alternatives on the grid.