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Adverse policies hinder wind energy investments in Tamil Nadu

According to reports, Tamil Nadu is losing out on the one viable opportunity to tackle the prevailing power shortage – increasing wind energy generation, by its adverse policies, according to Ramesh Kymal, Chairman, Indian Wind Turbine Manufacturer’s Association.

In an interaction with the Hindu group of publications, he said the recent tariff fixed by the Tamil Nadu Electricity Regulatory Authority has made investments in wind energy generation unviable. A meagre hike in tariff, the price the Tamil Nadu Electricity Board, the public sector utility pays power producers, has been offset by a hike in charges.

Investors have lost interest in setting up wind power generation capacity in Tamil Nadu as the charge, dubbed cross-subsidy charge of about Rs 1.30 per kWhr, makes investments in wind project unviable, according to Kymal.

There has been a nearly 75 per cent drop in additions to wind generation capacity. Against 650 MW of capacity added in the first quarter of 2011-12, just about 150 MW was added in the corresponding period this year. Capacity additions are happening in Gujarat, Rajasthan, Maharashtra and Karnataka, where policies are more favourable, according to Kymal who is also the Managing Director of Gamesa India, a multinational manufacturer of wind energy generation equipment.

Aggravating the issue, is the delay in the utility paying wind energy generators who supply power to the grid. With the delay over one year, financial institutions are not keen on funding wind power projects and this further hits wind power installation. With nearly 7,000 MW of wind energy generation capacity, Tamil Nadu emerged among the leaders in wind energy. This paid off in recent years when wind energy supported the nearly one-third supply shortage, a shortfall of about 4,000 MW, that has hit the State.

Expanding wind energy generation capacity is a ready option to address the prevailing shortage which is bound to worsen as conventional power project continue to be delayed. The State Government should look at increasing support to wind energy through more incentives such as a ‘State-sponsored generation-based incentive,’ he said.

Transmission infrastructure has proved another major bottleneck. The Tamil Nadu Electricity Board is yet to take a decision on establishing sub-stations with private sector support in Kayathar, south Tamil Nadu. Speeding up this project will help add at least 1,000 MW of wind power in the region, he said.

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