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Tamil Nadu emerges renewable energy hub

According to reports, Tamil Nadu has clearly established itself as a hub for renewable energy with a diverse spread of clean power options, including wind, solar, and biomass-fuelled power and co-generation power.

While the installed conventional power generation capacity is 10,722 MW, that of renewable energy is about 8,100 MW.

Wind energy is the biggest contributor to the share of renewable energy with more than 7,100 MW capacity followed by biomass and cogeneration contributing over 600-700 MW.

Solar power generation is the newest on the block with the State Government unveiling a solar energy policy last year and setting a target of 3,000 MW of grid-connected solar power over the next three years. In addition, it has announced a programme of roof-top power generation as a part of a major housing project. Right now, solar contributes around 7 MW of power.

However, investors have a grouse on the policy and tariff front, which can be corrected and the State’s full potential can be exploited, say industry representatives.

Solar power is the new buzzword in the State with the Government announcing a Tamil Nadu Solar Energy Policy 2012. The Tamil Nadu Generation and Distribution Corporation has tied up with over 90 investors to supply a total of 226 MW of solar power. The State-run utility hopes to achieve the targeted capacity of 3,000 MW as envisaged under the policy. In addition, roof-top solar power generation is also set to get a fillip with authorities providing for net metering. Solar power generated from rooftops can be fed into the grid and the consumers will only have to pay for the net electricity consumed.

Ramesh Kymal, Chairman, Indian Wind Turbine Manufacturers Association, says that a latest study, commissioned by the CII and the Sakthi Foundation, and done by the World Institute for Sustainable Energy has found that there is potential to add over 2,000 MW of wind energy in the State. But the capacity addition has petered out due to lack of policy support at the State level.

The transmission infrastructure bottlenecks leading to wind power evacuation problems and the cross subsidy surcharge levied on wind mills have hit the proposal’s viability.

In 2011-12, over 1,000 MW of wind generation capacity was added but in the current year, only about 200 MW.

“All it takes is the addition of 400 KV sub-stations to address evacuation issues,” but that is not happening fast enough.

Kymal, who is also the Managing Director of Gamesa India, an Indian subsidiary of the Spanish wind turbine maker, said that the company had sought permission to set up a sub-station but after waiting for approval from the authorities for more than a year, it had decided to drop the plan.

Last summer, wind energy had contributed to nearly one-third of the power supplied to the grid proving its ability to match conventional infrastructure.

The authorities need to take a ‘helicopter view’ of the power situation and include wind as a component. Gas-based power plants coordinated with wind power can complement each other. When wind drops, gas-based power plants can be ramped up fast to keep the grid going.

Repowering – replacing old, KW class wind mills with MW class wind mills – should be expedited. This would add 1,500 MW of additional capacity.

Maharashtra, Rajasthan, Karnataka and Andhra Pradesh are the key focus areas of wind investments, he said.

There appears to be a view that the wind sector has matured enough to be left alone. That is not true; it needs to be nurtured and an enabling environment created, Kymal said. According to the Tamil Nadu Biomass Power Industries Association, there is about 500 MW of installed capacity of which just about 175 MW is in operation. The tariff of Rs 4.85 a unit is unviable, says the industry.

Biomass uses agri-waste, forest waste and wood cultivated in waste and degraded lands. It has the potential to use municipal solid waste and can address the problem of waste generation in cities.

But the sector’s potential is yet to be realised – over 1,000 MW of capacity can be added but not even the existing capacity is being fully used.

Biomass does not get the incentives like attractive tariffs and is not protected by renewable energy purchase obligation on buyers. These measures are being used to support wind and solar power, according to the Association. The industry is looking for support such as allocation of waste land for fuel wood cultivation, higher tariff, waiver of the 5 per cent electricity tax and priority in sourcing fuel wood. Sugar mills in the State have set up cogeneration power capacities that use sugarcane fibre, bagasse as a fuel to generate power. They supply surplus power to the grid. The total installed capacity is about 660 MW mostly in the private sector mills. The State Government has announced a major initiative to set up cogeneration units in the cooperative sugar mills.

According to an official announcement, over 183 MW of cogeneration capacity will go on stream in the cooperativesugar mills in the current year.

One comment

  1. On what basis did they install 500 MW Biomass projects (without accounting the assured biomass supplly with cost escalations) and sucked the Capital Subsidy and how these projects were certified? Apart from the loot of Capital subsidy, these companies have already taken Accelerated Depreciation (i.e they did not pay Corporate Tax with this provision in law). So, how much more free money they want from the poor farmers (i.e through Government as agents)?

    500 MW x 6.5 = Rs. 3250 Crore invested. Capital Subsidy of 1.5 cr/MW = 500 x 1.5 = Rs. 750 Cr already taken back from the Government or the poor farmer or people of TN. PLUS the Accelerated Depreciation of 80% of investment = 500 x 6.5 x 0.8 = Rs. 2600 Crore is not paid in the form of Corporate Taxes i.e State become poor by Rs. 2600 Crore (without job creation as many of them are not functioning, so the defeat of these sops or the purpose of economic development!! of a neither Socialist Country nor Capitalist Country, but, loot persisted and is persisting as the Wind sector is still wanting to avoid paying taxes through AD, which is removed!!)…..

    Please take note of irony that the total amount invested for 500 MW Biomass power plant is Rs. 3250 Crore, the Benefits out of the Government is ( 2600 + 750 = 3350 Crore) which means the Government funded the entire projects with an excess of Rs. 100 Crore, but, someone else owns the property, no cheap power (if it were to be a government project, the assets would have been in the Government name at least and the power could have been generated with lots of jobs !!!)

    Look at the way how Indians are shining as FOOLS and FOOLS forever with these kinds of policies and benefits for few lobbyists or Entrepreneurs?? Is this Economy or Pseudo Economy with Wizards sitting at the helm of affairs that too qualified in Wharton, Cambridge, Oxford, IIM or you name any networking institutions, you find them, but, what is the use of this education when the COUNTRY FIRST culture does not exist??

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