TANGEDCO Procures 1,000 MW Power for Evening DemandTANGEDCO Procures 1,000 MW Power for Evening Demand Tamil Nadu Generation and Distribution Corporation (TANGEDCO) has announced plans to procure an additional 1,000 MW of electricity specifically for evening hours through a five-year tender. This move aims to mitigate the rising demand for electricity while minimizing financial strain on the utility. Shift from Costly Day-Ahead Purchases TANGEDCO has received approval from the Tamil Nadu Electricity Regulatory Commission (TNERC) to switch from expensive day-ahead power purchases to medium-term tender purchasing. This decision, effective September 1, 2024, will significantly reduce the financial burden associated with costly intraday purchases. Suggestions from TNERC TNERC has provided TANGEDCO with several suggestions to consider, including generating electricity from hydropower, gas, and battery energy storage systems. The commission also recommended extending procurement hours to attract more bidders. Addressing Power Demand The high peak demand for electricity has consistently exceeded 16,000 MW in Tamil Nadu, leading to a shortage of 4,000 MW during evening hours. TANGEDCO has opted for medium-term power purchase to meet this demand more economically than through day-ahead market purchases. Forecast and Shortfall TANGEDCO’s 20th Electric Power Survey forecast predicts a shortfall in peak evening demand ranging from 2,799 MW in 2024-25 to 8,608 MW in 2029-30. This shortfall is attributed to delays in commissioning several thermal and nuclear power projects. Tender Specifications TANGEDCO plans to float tenders for the purchase of 1,000 MW of power for five years, with procurement hours extended from 4 pm to 2 am. This will increase the attractiveness of the tender to bidders. Recommendations from TNERC TNERC has suggested that TANGEDCO consider inviting bids from gas and hydro power plants, as well as exploring the option of 24-hour power supply. The commission also recommended exploring battery energy storage systems to supplement power supply during peak hours. By implementing these measures, TANGEDCO aims to meet the growing demand for electricity in Tamil Nadu while minimizing financial challenges and promoting sustainable energy solutions.
CHENNAI: Tangedco, the state’s electricity producer and distributor, has decided to procure an additional 1,000 MW of power specifically for evening hours through a five-year tender instead of costly intraday purchases to meet the rising demand for electricity, which has been on a peak since last year.
The Tamil Nadu Electricity Regulatory Commission (TNERC) has approved Tangedco’s proposal to move away from costly day-ahead power purchases to meet evening peak demand and switch to buying power through a medium-term tender, effective September 1, 2024, for five years. This will significantly ease the budget.
Meanwhile, TNERC has shared suggestions with Tangedco to consider generating electricity using hydropower, gas and battery energy storage systems and extending procurement hours.
Tangedco has decided to opt for a medium-term power purchase of 1,000 MW for the evening peak demand as the power demand has consistently exceeded 16,000 MW on all days except during monsoon and public holidays since 2023. Due to the high peak demand, the state is facing a shortage of 4,000 MW during the evening hours, leading to load shedding. Tangedco is forced to resort to intraday power purchases through high-price day-ahead market (DAM) at a rate of Rs 14 to Rs 20 per unit, increasing the financial burden on the utility.
Tangedco has also submitted the 20th Electric Power Survey forecast, which predicts a shortfall of 2,799 MW in 2024-25 to 8,608 MW in 2029-30 during peak evening demand.
Tangedco claimed that the shortfall is due to expected delay in commissioning of the ongoing 1,320 MW Ennore SEZ and 1,320 MW Udangudi thermal power projects and the 1,000 MW Kudankulam Stage 3 nuclear power plant.
“Therefore, procuring thermal power during peak hours through the tender process will be more economical than buying peak power through Power Exchanges,” the utility said. The TNERC has approved Tangedco’s proposal to float tenders for the purchase of 1,000 MW of power over five years and has proposed to make it valid for extended hours from 4pm to 2am to attract more bidders with a guaranteed purchase for at least six hours.
The commission has also suggested that Tangedco invite bids from gas and hydro power plants and consider the option of 24-hour power supply instead of peak power to make the tender more attractive to bidders. The excess power available from the generator can be sold through the real-time market to reduce the cost of purchasing power, the regulator said.
“Similarly, tenders can be floated by developers of Battery Energy Storage Systems (BESS) by supplying power to the developers during surplus period and discharging it during peak period,” the committee suggested.
