There has been a lot of concern from the international lenders and multilateral agencies about the financial health of the state distribution companies and their ability to pay for the PPA’s.
Tamil Nadu has the largest installed capacity in wind with installed capacity upwards of about 5887MW of which about 997MW was installed in the year 2010-11. The overall installed capacity in the year 2010-11 was about 2300MW.
A couple of weeks ago, the wind turbine manufacturers had announced of a plan to ask for an increase in tariff from the Tamil Nadu government, Panchabuta had mentioned that developers we spoke to have said that they would like a better payment schedule for their existing wind farms in Tamil Nadu. Most developers that we spoke to indicate that their typical payments are delayed by at least 4-6 months and that affects their projects significantly. It is in spite of these delays that projects continue to get installed in Tamil Nadu.
IPP developers that we spoke to indicate that if the payment was better and made as per the terms in the PPA and with improvement in evacuation facilities, Tamil Nadu could continue to maintain its dominant position in wind installations. It is this position that has led to huge manufacturing bases and jobs in the state something that the decision makes need to consider. With some of the action shifting to Maharashtra and Gujarat in terms of installations, new manufacturing facilities are being located in those states.
We had also mentioned that the Tamil Nadu Electricity Board (TNEB) has not paid for the power purchased from them in the last eight months. The arrears are now a whopping Rs 1200 crore.
According to reports, speaking to reporters, M Kandhasamy, president, Coimbatore District Small Industries Association said that the state should give priority to strengthen the southern grid so that surplus power from North India can be easily transmitted to Tamil Nadu.
Members of about 38 industrial associations, who were present, said the Government should immediately pay arrears to windmill promoters so that investors can install wind mills in Tamil Nadu, instead of going to neighbouring States. Tamil Nadu had purchased power from neighbouring States to the tune of Rs 5,900 crore last year alone, by which a 1000 MW unit could have been installed, they said. Similarly, with Rs 19,500 crore spent on buying power for the last five years, the Government could have set up power plants to generate 5,000 MW, the members claimed.