Tamil Nadu Electricity Regulatory Commission Approves 270 MW FDRE Procurement To Strengthen Tamil Nadu’s Grid Reliability

The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved the procurement of 270 MW of Firm and Dispatchable Renewable Energy (FDRE) to strengthen the state’s power supply system. The approval was granted through an order dated February 19, 2026, allowing the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) to sign a 25-year power purchase agreement with the Solar Energy Corporation of India (SECI).

The procurement is part of the Inter-State Transmission System (ISTS)-connected Round-the-Clock (RTC) Tranche-IV scheme. Unlike conventional solar or wind projects that depend on weather conditions and can generate fluctuating power, FDRE projects are structured to supply electricity in a firm and reliable manner throughout the day. This round-the-clock supply is important for grid stability, especially as Tamil Nadu increases its renewable energy capacity.

Under the approved arrangement, the tariffs for the 270 MW capacity are fixed at ₹5.06 and ₹5.07 per unit. In addition, a trader margin of 7 paise per unit will be paid to SECI. The Commission observed that the tariffs were discovered through a competitive bidding process and were reasonable considering the need for reliable renewable energy supply.

TNPDCL, which was recently separated from TANGEDCO as part of power sector reforms, approached the Commission for approval citing the sharp rise in electricity demand. The state’s peak power demand is projected to increase from around 20,701 MW in 2024-25 to more than 35,500 MW by 2034-35. At the same time, the utility must meet Renewable Purchase Obligation (RPO) targets, which require a growing share of electricity to come from renewable sources. These targets are expected to cross 43 percent by 2029-30.

The Commission noted that the increasing share of renewable energy has created operational challenges for the grid. Thermal power plants often have to quickly increase or decrease output to balance sudden changes in solar or wind generation. By procuring FDRE, the utility can reduce such stress and lower its reliance on conventional thermal sources. The move also supports the national objective of achieving 500 GW of non-fossil fuel capacity by 2030.

Although Battery Energy Storage Systems and Pumped Storage Plants are being developed, TNERC observed that FDRE is a practical near-term solution, as storage projects usually take longer to complete. The projects were selected under a transparent Build-Own-Operate model with strict financial and eligibility conditions to ensure long-term stability.

In its final order, TNERC stated that the procurement is in the larger public interest, balancing clean energy goals with reliable supply. TNPDCL has been directed to submit a detailed status report on the progress within four weeks.