TN set to ink power deals with private players for five years to tide over shortfall
The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved TNPDCL's proposal to float a tender for 800 MW to procure electricity from generators in other states under medium-term power purchase agreements.
The tenders will soon be floated on the Union power ministry's DEEP portal, and agreements will be signed with the lowest bidder using the reverse auction method. For the remaining 700 MW, TNPDCL wants to sign agreements with generators within the state to ensure availability of power.
TNPDCL officials said the medium-term supply is necessary as existing long-term power purchase agreements (15 years) for 2,830 MW end in 2028.
Since the state power utility cannot sign long-term agreements until 2028, it decided to sign medium-term power purchase agreements to keep costs in check.
"The power cost in short-term power purchase agreements ranges from 8 to 10 per unit, but the medium-term agreements would ensure low-cost power," said TNPDCL officials.
Of the four medium-term agreements of TNPDCL, two have already expired, while power delivery has not started in two other agreements due to issues in coal availability to the plants.
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The central electricity authority, in its resource adequacy report to Tamil Nadu, suggested that TNPDCL sign power purchase agreements as the shortfall to meet the power demand is estimated to be 3,845 MW in 2026-27 and 6,822 MW in 2029-30. While TN gets 15,043 MW of thermal power from central generating stations and power purchase agreements, among others, additional power is required to meet the evening peak in demand due to unpredictable nature of renewable power sources.
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