The Tamil Nadu Electricity Regulatory Commission (TNERC) has dismissed a petition filed by Tamil Nadu Green Energy Corporation Ltd. (TNGECL) seeking approval for the procurement of solar power under the PM-KUSUM Scheme Component-A. The petition was related to a tender floated for purchasing 420 MW of solar power to support decentralized renewable energy generation in the state.
The PM-KUSUM scheme, launched by the Ministry of New and Renewable Energy (MNRE), aims to promote solar energy projects by allowing farmers to set up solar plants on their land. Under Component A of the scheme, solar power plants between 500 kW and 2 MW are set up close to substations to supply electricity to agricultural feeders. The scheme also provides incentives to distribution companies (DISCOMs) and farmers, helping to reduce transmission losses and promote clean energy.
In its petition, TNGECL sought approval to ratify the tender process for 420 MW of solar power without specifying an upper ceiling tariff. The company requested permission to enter into long-term Power Purchase Agreements (PPA) with four farmers totaling 5 MW at a tariff of ₹3.28 per unit. The bidders were selected through a reverse bidding process, with the tariff negotiated without passing on the Procurement-Based Incentive (PBI) benefits to the farmers.
The Commission observed several issues with the petition. It found that the tender was floated without an upper ceiling tariff, violating both TNERC’s previous order and MNRE guidelines. The proposed tariff of ₹3.28 per unit was also deemed higher than similar rates in other states. Additionally, the petition’s details on passing PBI benefits to farmers were inconsistent and lacked proper documentation.
The Commission criticized TNGECL’s handling of the tender process, stating that the limited response of only four bidders for 5 MW out of the approved 420 MW indicated poor promotion of the scheme. It directed TNGECL to revise the tender, adhere to MNRE guidelines, and establish a dedicated online portal to facilitate land leasing by farmers.
The TNERC emphasized the need for better transparency and wider participation in future tenders. It instructed TNGECL to advertise tenders in Tamil and English, consult with distribution companies before issuing tenders, and explore direct payment mechanisms for land leases to encourage farmer participation.
The order highlights the importance of following regulations and promoting decentralized renewable energy projects to support both farmers and the clean energy transition in Tamil Nadu.
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