‘Procuring peak-hour electricity through tender process is more economical’

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The Tamil Nadu Power Distribution Corporation Limited (TNPDCL) has said that the procurement of thermal power during peak hours through the tender process would be more economical than purchasing power through exchanges.

In a petition before the Tamil Nadu Electricity Regulatory Commission (TNERC), TNPDCL (Tangedco’s new name after demerger) sought a nod for the procurement of 1,000 MW during peak hours (18-24 hrs) from thermal power generating stations.

It said that the net availability from conventional sources was 12,665 MW.

The estimated capacity additions for the period from 2024 to 2030 in the ongoing projects — Ennore SEZ STPS, Udangudi stage I project, and Kudankulam APS unit 3 — are also getting delayed, and are expected to be commissioned and contribute to the grid beyond the forecasted period. the State power utility said.

Tamil Nadu’s power grid hit a new high, reaching a demand of 20,830 MW on May 2, and a new peak in daily consumption with the State using 454.32 million units (MU) on April 30.

During the peak-hour period, the prices in the market are always high. In spite of placing a bid for the purchase of power at the maximum bidding price of ₹10 per unit in the power exchange, TNPDCL said that it could get only 15%-25% of the bid quantum block-wise, as buy bids were always more than double the sell bids in some blocks, indicating higher demand and lower supply.

TNPDCL said that it had to resort to purchase of power through High Price Day Ahead Market on power exchanges at the rate of ₹14-₹20 per unit, which increased the financial burden.

The average cost of power purchase through exchanges during January 2023 to October 2023 was ₹9.595 per unit. But through long- and medium-term tender power purchase agreements, the power purchase cost ranged from ₹3.56 to ₹6.14 per unit for October 2023, it said.

TNPDCL had initially proposed a contract period of five years from March 1, 2024 to February 29, 2029, and later proposed to change the commencement date to September 1, 2024, TNERC said.

TNPDCL was projected to have a demand deficit of well above 1,000 MW for evening peak hours, TNERC said, and gave its nod for the proposed procurement.

The state power regulator directed TNPDCLto speed up the projects in pipeline with vigorous follow up and offered a slew of other suggestions including exploringbidding from gas power stations, hydro power stations.