According to reports, until a few years ago, India’s annual wind power generation capacity addition competed well with the most prolific conventional energy source, coal. So much so that in one instance, it exceeded the rate of capacity addition from all conventional sources. That, however, had more to do with the tardy pace at which thermal plants were being built.
The situation now is quite the opposite.
Power generation capacity addition in the conventional sphere has been taking place at a furious pace over the last three years—around 8,000-10,000 MW per annum—as much as three times that recorded in the previous years. However, the performance in the wind sector, which accounts for as much as 70% of renewable energy capacity in the country, has waned. Wind corridors and wind speeds that hold the key to the production of electricity still continue to enthuse investors in several states.
This is especially so for Tamil Nadu, which has the highest installed wind capacity in the country at around 14,000 MW (almost half the total). However, the prevailing power policy of the state has turned away investors. The state-owned distribution utility has not paid generators to the tune of more than Rs.1,000 crore due to its precarious financial condition. Moreover, a recent, modest tariff hike has been more than offset by other charges, leaving the investors poorer. As a result, against a capacity addition of around 1,000 MW last year, this year, the projection is no more than 250 MW.
The Union government can redress this situation. A multi-state supply programme will prove to be ideal, as the risk of defaults in power purchase payments are defrayed. The Union government, through its power companies, should consider investing either on its own or in partnership with private companies in wind power and harness this capacity that is not transferrable and, unlike coal, cannot be carted across to plants located in other states. To avert defaults, the electricity bills must be included in the reform-restructuring package that is on offer by the government.