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Tamil Nadu hikes transmission charges- likely to impact REC market

According to reports, the Tamil Nadu Electricity Regulatory Commission has recently permitted the state transmission utility to hike transmission charges, practically tripling them. This is likely to have a big effect on REC market, and consequently, on the investments into the State, experts say.

The state has hiked long term open access transmission charges from Rs 2,781 per MW a day to Rs 6,483; and short-term open access transmission charges from Rs 28.96 per MWh to Rs 270.11— nearly ten times. Alongside, the State has also increased the ‘scheduling charges’ for wind power units by 20 paise a unit.

This will impact very heavily on the REC market, says Mr Vishal Pandya, Director, REConnect, a consultancy that helps companies get and trade in RECs.

Already, a couple of prospective investors have decided against investing in the State, he said.

Tamil Nadu is one of the states that permits a renewable energy generator to sell the power to a ‘captive consumer’. Such sales are usually at a negotiated price that is much higher than what the generator would have got, had he sold it to the state distribution company.

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