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For a long time, not much action was evident in what is believed to be the ‘most happening place’ for the solar industry - Tamil Nadu. This had a lot to do with one key fact - the State’s electricity regulator having just one member.

Now, with the appointment of S. Rajagopal as member, Tamil Nadu Electricity Regulatory Commission (the TNERC Chairman has not yet been appointed) the solar industry believes sunny days are ahead. Rajagopal is currently director-finance at Tangedco, the State electricity generation and distribution utility.

The general expectation is that the Commission will now take long-pending decisions, the most crucial of which is the signing of the power purchase agreements with firms that won rights to put up solar projects and sell electricity to Tangedco through a bidding process that was run a year ago.

The PPA-signing is a big event that the entire solar industry has been anxiously awaiting - about 700 MW of solar projects worth INR 5,000 crore could get off the mark once the PPAs are signed.

Commission’s nod

The agreements could not be inked because the Commission had not approved them. The Commission didn’t do that for three main reasons.

First, it feels that the tariff discovered through last year’s bidding process — INR 6.48 per kWhr with 5 per cent annual escalation for ten years — is rather high. Tangedco’s point of view is that the tariff, being market-determined, ought to be approved by the regulator.

Second, some industry bodies have filed cases against the imposition of the ‘solar purchase obligation’ on specified classes of consumers.

The Commission prefers to wait until the cloud over this is cleared. Business Line learns that the Court’s judgment on this will come in the third week of this month. Third, the Commission had only one member — and therefore did not want to take major decisions. Rajagopal’s appointment is expected to remove the first and the third of the hurdles.

Terming his appointment as a “positive sign”, Bikesh Ogra, President of Solar Business, Sterling & Wilson (of the Shapoorji Polonji group), said “the fact that the newly-appointed member comes with recent Tangedco background sends strong signals to the industry.”

Ogra expects that TNERC will now be able to fast-track the PPAs. Vivek Jayakumar, Executive Director of the solar consultancy, Arbutus, also feels that Rajagopal’s appointment would “accelerate the State’s solar programme.” Not just the PPAs, but a whole lot of other regulations relevant to the solar industry are expected to be decided on by the Commission, other industry analysts say.

For instance, the Commission has yet to determine charges that solar power producers should pay if they provide power to customers using the State-owned grid It has also not decided on charges for defraying the State’s burden of subsidising the poor and whether or not power producers can ‘bank’ their power and draw it back at some later date.

Source-On Request