CHENNAI: In a move to open up the state’s power transmission sector to private companies, Tamil Nadu will soon introduce a tariff-based Competitive Bidding (TBCB) system.
Currently, TANTRANSCO, the state transmission utility, installs transmission lines through private companies based on a bidding process. Once the project is completed, the bidder will transfer the assets and the state utility must maintain them. Under TBCB, private bidders who win the contract must also maintain the transmission lines at their own risk. This is expected to reduce transmission losses and voltage fluctuations.
States like Assam, Gujarat, Haryana, Punjab, Odisha, and Maharashtra have already implemented the TBCB mechanism for intrastate power transmission. The Tamil Nadu Electricity Regulatory Commission (TNERC) has invited stakeholders to give their opinion before September 20. In a statement, TNERC underscored the importance of developing transmission systems in a cost-effective manner and the need to adopt best practices and foster competition among developers. The competition will bring in new technology and innovation, leading to a reduction in tariffs and timely completion of projects, TNERC said.
The commission has also proposed to initiate steps to fix the threshold limit for the development of intrastate transmission projects under TBCB. It aims to strike a balance in fixing this threshold by ensuring that the projects are neither too small nor too large so that they can attract enough competitive bidders and participation is not restricted to a few companies.
As most of the transmission projects of TANTRANSCO cost a minimum of Rs 200 crore, the TNERC has proposed a threshold limit of Rs 200 crore for setting up intrastate transmission projects. Beyond this limit, all new and augmentation projects should follow the TBCB system as per the extant guidelines of the transmission utility.
‘Decision may impact wind and solar energy producers’
The commission may revise this threshold limit through special orders based on suggestions from TANTRANSCO and the state government. Tamil Nadu Spinning Mills Association chief advisor K Venkatachalam said, “Even though consumers may not be directly connected to TBCB, the decision may have a strong impact on wind and solar producers. We will give our opinion after discussion with our members.”
S Jeyakumaran, CEO of Vayulo Energy, a windmill producer located in Tirunelveli, told TNIE, “The intrastate transmission system primarily exists because states face challenges in providing land for wind and solar projects under the national mission scheme. The intrastate transmission system may make it easier for states to connect with one another. Thus TBCB may ensure balance between power supply and demand. This would benefit consumers by giving them consistent voltage and electricity,” he said.
Stakeholders asked to give an opinion before Sept 20
TNERC says the new bidding system will foster competition among transmission system developers. The competition will encourage the introduction of new technology and innovation and will lead to a reduction in tariffs and timely completion of projects. TNERC has asked stakeholders to give their opinion before September 20