According to reports, wind power capacity addition fell by nearly half in the first three months of the current financial year over the same period of last year. The fall was led by the two states – Tamil Nadu and Rajasthan – where the state-owned utilities have not paid the wind power producers their dues for several months.
The total capacity addition in the April-June period this year was 207.15 MW compared with 394.63 MW in the same period last year.
In Tamil Nadu, the windiest State in the country, capacity addition fell from 180.08 MW to 84.7 MW. In Rajasthan, capacity addition this year was just 4.25 MW compared with 95.1 MW in the first quarter last year. Gujarat also saw a dip — from 83 MW to 40 MW. Karnataka was the biggest gainer — the State added 21 MW compared with 0.8 MW last year.
A number of reasons have caused the fall in the capacity additions, industry sources say. The biggest of them is the problems that wind power developers are facing in Tamil Nadu — both in terms of delayed payments from the state utility, Tangedco, and due to reasons such as inadequate availability of the grid.
Further, wind power developers fret over clouds looming over Tamil Nadu. Tangedco is fighting for the removal of the ‘banking facility’, which allows developers to put any surplus generation into the grid and draw it back when they might need it. This has been a major benefit because wind power producers who also have other industries could ‘bank’ their surplus generation — which happens during the summer months — and take it back at other parts of the year, paying only the wheeling and transmission charges to Tangedco.
What also caused the dip in capacity addition is the abolishing of the ‘accelerated depreciation’ benefit, which helped wind power developers in tax planning. The abolishing of the benefit has been a sour point with the industry, which is lobbying strongly for its reinstatement.
The issue is sure to come up in the discussions that the Minister of New and Renewable Energy, Dr Farooq Abdullah, is to hold with the wind power industry on August 1.