CHENNAI: In an effort to avoid high-cost power purchases, amid recent controversy over bids of up to Rs 41 per unit, the Tamil Nadu Power Distribution Corporation Ltd (TNPDCL) has barred gas-based generating stations from participating in its fifth short-term power procurement tender. The power utility has instead focused exclusively on coal-based thermal power plants, effectively reducing potential power costs.

The decision follows previous short-term tenders that attracted high quotations, with gas-based power stations among the highest bidders. Bids in the earlier tenders went up to Rs 37 per unit and Rs 41.50 per unit, raising concerns over the cost of procuring power from the short-term market.

The latest tender, issued on November 1, seeks to procure round-the-clock (RTC) power of varying quantities between January 18 and June 15, 2027. TNPDCL has sought 2,000 MW for the second half of January, 3,000 MW for February, 3,500 MW each for March and April, and 2,500 MW each for May and the first half of June. The tender aims to meet peak summer demand without resorting to last-minute procurement by starting the process well in advance.

The power is to be supplied round the clock, with delivery at the Tamil Nadu state periphery. The minimum bid quantum from each source has been fixed at 20 MW. Both interstate and intrastate generators and licensed electricity traders are eligible, provided they source power exclusively from coal-based thermal plants.

This marks a significant change in the procurement conditions compared with the earlier tenders, which allowed participation from different generating sources. TNPDCL has now narrowed the supply source to coal-based thermal stations, seemingly to prevent expensive gas-based generation from pushing up procurement costs.

In another departure from the previous procurement conditions, the latest tender is exclusively for round-the-clock (RTC) power. Earlier tenders required generators and traders to participate in both peak-hour and RTC arrangements, accepting offers only if they offered power under both categories. The quantum offered during peak-hour events was also required to be at least 60% of the RTC quantum.

The first tender, floated for peak-hour and night-time power from October 12 to 31, received bids of up to Rs 37 per unit. The second, seeking 1,000 MW of peak-hour power from November 2026 to May 2027, attracted quotations of up to Rs 41.50 per unit. The third tender, which sought varying quantities of power for peak hours, RTC and night-time supply from November to January, received bids of up to Rs 35 per unit.

The status of the fourth tender, floated to procure RTC and peak-hour power between February and July 2027, is not yet known.