Wind Power Procurement in Tamil Nadu through Reverse Bidding Process: Highlights, E-Tendering Process and Terms


The MNRE has issued draft “Guidelines for development of Onshore Wind Power Projects” vide notification No. F./No.66/183/2016-WE dt:22.10.2016 in which it has given guidelines for development of Onshore Wind Power Projects for achieving the ambitious target of 60GW of Wind Power installed capacity in the country by 2022. For achieving the target the current rate of deployment of Wind Power capacity is required to be more than doubled.


The Tamil Nadu State has a total installed wind generation capacity of 7850 MW as on 31.03.2017.

Further the TNERC Notification (dt: 07.03.2016) has fixed RPO target of 14% for 2017-18 and TANGEDCO needs to purchase 500 MW to meet out this RPO as a first phase.

Hence in order to facilitate the developers to establish Wind Power Projects of capacity 25 MW and above and also to have a competitive rate, TANGEDCO has proposed to procure wind power from these Projects through a Long Term Power Purchase Agreement up to a capacity of 500 MW considering a fixed tariff of Rs.3.46 as an upper limit.  The developers will be selected through reverse bidding process.

The E-Tendering process


E-Bid Terms & Conditions

General Requirement and Scope of Services

RFS document along with bids are invited through Electronic mode (e-bidding) from Wind Power Generators (WPG) by the Chief Engineer, NCES, TANGEDCO, Chennai-2 for procurement of 500 MW Scope of Services: To establish, maintain and operate Wind Power Projects for a minimum of 25 MW with at least 5MW project at one site for a single bidder or company or group of companies in Tamil Nadu and to supply the generated Wind power to TANGEDCO under long term Energy Purchase Agreement (EPA) at the rate to be finalized through reverse bidding, considering the fixed tariff of Rs.3.46 per unit as upper limit, without any escalation during the contracted period.


Earnest Money Deposit (EMD):

For serious participation, Rs.25,000/ per MW in the form of Bank Guarantee/Cash/D.D/ RGTS/Bankers Cheque valid for a period of 180 days from the date of opening of techno commercial bid   is to be submitted. TANGEDCO will release the bank guarantees to the unsuccessful bidders within reasonable time , but bids not satisfying the EMD criteria will be summarily rejected.


Important Dates


Bid Qualification Requirement (BQR):

The Bidder should be financially sound and the Bidder should have to give documentary proof of having financial capability to carry out work.


Rejection criteria:

The bid of any company / firm / Individual may be rejected by TANGEDCO if:

  • It is observed that the WPG has not furnished the scanned copy of relevant receipts towards EMD payment, net worth certificate and payment of processing fee through RTGS.
  • The signed copy of RFS does not conform to the TANGEDCO’s technical specification or commercial terms.
  • If price bid is quoted along with techno commercial bid.
  • Only those WPG who can fulfil the technical criteria, financial criteria, EMD, payment of processing fee and producing net worth certificate are to be considered for further evaluation and price bid opening.

Energy Purchase Agreement (EPA) period and Tariff

Fixed tariff for 25 years.  However, the tariff of Rs.3.46 per unit is the upper limit.

The EPA period shall be 25 years. The WPG are free to operate their Projects after the expiry of 25 years EPA period. However, any extension of the EPA beyond 25 years shall be through mutual agreement between the WPG and the TANGEDCO. The WPG may like to take land for longer period, preferably 40 years, in order to be able to run the Project beyond 25 years.

Capacity Utilisation Factor (CUF) :

The Capacity Utilisation Factor (CUF) shall be 20% to 27.15% when calculated on yearly basis. In case the availability is more than the maximum CUF specified i.e. 27.15%, the TANGEDCO will purchase the excess generation, at 75% of the PPA tariff. In case the availability is less than the minimum CUF specified i.e. 20%, the WPG shall pay TANGEDCO for the actual shortfall in terms of units at the prevailing forbearance price fixed by the CERC.

Other covered areas

  • Offtake constraints due to grid security
  • Termination Compensation
  • Qualification Criteria and Formats of Document in Annexure
  • Payment of Security
  • Specific Roles of STU/TANGENCO  and WPG


The Way Forward

On successful completion of the process, Tamil Nadu would be the first State in the country to try reverse auction for wind projects when compared to the prevailing system of feed-in tariff that uses long-term agreements and pricing tied to cost of power production. Also, wind tariff in Tamil Nadu is already the lowest in the country at Rs. 4.16 per unit. It is set to fall further with the benchmark tariff fixed at Rs. 3.46 per unit for the tender. Vinay Rustagi, managing director at consultancy firm Bridge to India said “Given the success of recent auctions, all states will increasingly look to procure both wind and solar through auctions.”


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