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The Indian state of Tamil Nadu has announced the auction of 1GW of solar capacity for 2013 in order to meet its target of 3GW by 2015. Developers will be selected through a competitive bidding process where the lowest tender offered will win.
The state government has said it will achieve its target through utility-scale projects, rooftop installations and a REC mechanism.
But Ritesh Pothan from Natural Group, a renewable energy advisory organisation, questioned the decision use the REC. “The REC mechanism is now officially a failure," he told PV-Tech.
In a report last year, Pothan noted that because RECs are only valid for one year, they are not bankable and therefore investors remain wary and are less inclined to invest.
However, in its tender specification report, the state proposes to also procure the energy generated from these plants through a long term power purchase agreement up to a total capacity of 1GW, valid for 20 years.
Furthermore, the government has placed a minimum capacity for projects of 1MW but has set no upper limit. Bidders will also need to provide proof of purchase of land to complete the development and will have 10 months within which to bring it online.
The last date for the submission of bid is 4 January 2013.