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Tamil Nadu wind power generators get a boost

According to reports, wind power generators in Tamil Nadu received a booster dose today as the State’s electricity regulatory commission announced revision of the ‘average pooled purchase cost’ to Rs 2.54 a unit. This is a 7.17 per cent hike over the previous ‘average pooled purchase price’ (APPC) of Rs 2.39 a unit, which ceases from today.

In its order today, the Tamil Nadu Electricity Regulatory Commission (TNERC) said that the new APPC of Rs 2.54 a unit would “remain in force even beyond March 31, 2013, if no new rate (of APPC) is notified by March 31, 2013.”

APPC is the weighted average price at which an electricity distribution company buys power from various sources. The APPC is notified by the State electricity regulatory commissions.

Under the ‘Renewable Energy Certificate’ regime, companies that produce power from renewable sources have three options to sell their power — sell it to electricity distribution companies at a ‘preferential tariff’, (which, in Tamil Nadu, has just been hiked to Rs 3.51 a unit), or the distribution companies at the ‘average pooled purchase cost’ and get trade-able renewable energy certificates (‘APPC+REC’ model), or sell to consumers directly, either in the open market or by making consumers shareholders in special purpose vehicles that own the power projects — the ‘Captive+REC’ model.

In Tamil Nadu, the capacity under ‘APPC+REC’ is around 600 MW.

Wind power companies have preferred either the ‘preferential tariff’ route, or the ‘captive+REC’ route. The capacity under ‘APPC+REC’ route has not been much.

The industry has viewed today’s hike more as a positive indication than as an instrument of change. K. Krishnakumar, Managing Director, Orient Green Power, said that while he welcomed the hike, he expected “at least Rs 2.75.”

Vishal Pandya, Director, REConnect, a consultancy that helps companies secure and trade RECs, said that it was a “positive indication”, especially against the backdrop of prices of RECs declining.

A sore point with the industry has been that in calculating APPC, the regulators do not take into account the cost of purchase electricity from high-cost sources.

The APPC in Tamil Nadu, if calculated as per the guidelines of Central Electricity Regulatory Commission, works out to Rs 3.37, says Pandya.

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