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Wind capacity in TN tops 6,000 MW, but the future looks uncertain

Panchabuta had mentioned in December last year that, Japan Bank for International Cooperation (JBIC) is looking at providing equity funding to private sector projects in India instead of debt support for public sector entities. The principal Japanese overseas funding agency is also shifting its focus on the Indian market from China following political tensions with its Asian neighbour.

Earlier in February this year, Panchabuta had mentioned that the Japan Bank for International Cooperation (JBIC) that is looking at providing equity funding to private sector projects in India instead of debt support for public sector entities. The JBIC has earlier talked about intention to create a green investment fund not limited to India but mainly for India, with other partners such as the International Finance Corporation.

In May this year, Japanese International Cooperation Agency had evinced  interest in funding Tamil Nadu Electricity Board’s Rs. 40 billion wind energy grid infrastructure evacuation project.

 Japan International Cooperation Agency (JICA) had agreed to give Rs 7,361 crore as a soft loan to India for various infrastructure projects in India. The loan will cover six development projects in the areas of power, transportation, forestation and energy to support India’s efforts to improve its infrastructure.

According to reports, installed wind power capacity in Tamil Nadu has crossed the 6,000-MW mark and today stands at 6,067 MW, which is about 43 per cent of the capacity available in the entire country. But a big question mark hangs over the future of this sector in the State, because of the inadequacy of evacuation infrastructure.

The nervousness over the bottleneck is palpable in the industry. Although many companies – Techno Electric, Caparo and Tata Power, to name a few – have evinced interest in developing wind farms in Tamil Nadu, the poor evacuation infrastructure is sure to weigh on their minds when they actually put down money, note industry experts.

CLP Holdings, the Hong Kong-based power company, which has put up a 99 MW wind farm at Theni, Tamil Nadu, is said to have decided against expansion in the State, considering the evacuation bottlenecks.

There was a time when it was thought that Tamil Nadu may have exhausted its potential. But now, with improvements in technology even low wind speed sites are considered viable, says Mr T. Shivaraman, Managing Director, Orient Green Power Ltd, a wind power player. He reckons that there is scope to add at least another 5,000 MW in the State in the immediate future.

The Tamil Nadu authorities are obviously seized of the matter, but the State utility has no money to build the necessary infrastructure. TANTRANSCO, the State-owned transmission company has worked out a plan to put up seven sub-stations (four of 400 kV capacity and the rest of 230 kV) and attendant transmission lines.

This, TANTRANSCO reckons, will cost Rs 1,757 crore. Out of this, the sub-station part alone will cost Rs 1,588 crore.

The wind industry has mooted two suggestions to solve the funding problem. The first is for the State Government to press the Centre for a grant (or a soft loan) from the National Clean Energy Fund.

Strengthening transmission infrastructure for evacuating wind power in the southern districts of Tamil Nadu is the fittest candidate for financial support from the National Clean Energy Fund, says Mr Shivaraman.

The second suggestion is to build a public-private-partnership model, under which the private sector could put up the sub-stations. Under Section 10 (1) of the Electricity Act, 2003, a private company can be permitted to put up a sub-station, points out Mr Raghu. This way, the State utility will not be burdened financially and the infrastructure will still get built.

The evacuation infrastructure can be completely built within three years, Mr Raghu added. Wind power developers are keen on putting up farms in the State. Apart from low wind speed sites becoming now viable, there are also possibilities of re-powering (scrap the old machine and put a new, higher capacity one in its place), and inter-cropping (putting a tall windmill between two existing ones), the potential for adding capacity could run into tens of thousands.

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