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Setback to Tamil Nadu’s solar policy as electricity tribunal sets aside its order

According to reports, Tamil Nadu’s electricity tribunal on Tuesday set aside a government order placing solar energy obligations upon heavy power consumers, dealing a blow to ambitious government plans to generate an additional 3,000 megawatts (MW) of solar power by end-2015.

“The order of the Tamil Nadu Electricity Regulatory Commission (TNERC) is set aside on solar purchase obligation,” said judge Karpaga Vinayagam, chairperson of the Appellate Tribunal for Electricity, circuit bench, Chennai.

On 20 October 2012, Tamil Nadu unveiled a solar policy to generate 3,000 MW of solar power in three years. At present, the state generates only 20 MW of solar power.
According to the policy, heavy power consumers were to meet 3% of their total power consumption from solar energy by December 2013 and 6% by January 2014.

They could do so by either buying solar power or installing solar energy power generation units. The government plan was to set up at least 1,000 MW of solar power capacity a year.

A month later, the state government directed TNERC to issue orders on the implementation of the solar policy. Heavy power users in the state include information technology parks, special economic zones, telecom towers, educational institutions and buildings with over 20,000 sq.ft. area.
But a year ago the Tamil Nadu Electricity Consumers Association filed a challenge with the tribunal saying there was already a renewable energy obligation upon commercial consumers, which included wind energy and a small portion of solar energy as per a TNERC order of 2010.

The association also challenged the state government’s directive to the TNERC on implementing the solar policy.

Separately, the Tamilnadu Spinning Mills Association also filed a case saying that while they were not challenging the policy, there was insufficient installed capacity of solar energy promoted by the state or third party suppliers. Moreover, the mills had invested in windmills over the last few years and were thus already meeting their renewable obligation, they argued.

“Our contention is not objecting to renewable energy and its policies,” said K. Venkatachalam, chief adviser of the spinning mills association, which has 513 members. Spinning mills generate about 3,000 MW of the 7,000 MW of wind energy produced in Tamil Nadu, he added.
“They expected us to walk on sky. We are glad the un-fulfillable obligation has been waived,” said D. Balasundaram of the Tamil Nadu Electricity Consumers Association.

The Tamil Nadu Electricity Board, the state power utility, couldn’t be reached for comment.

“It seems that the Tamil Nadu government may have been too ambitious on solar power. With no adequate solar power installation by third parties or the state, it is not reasonable to expect heavy power users to meet the solar power obligation,” added Kalpana Jain, senior director, renewable energy, at the consultancy Deloitte Touche Tohmatsu India Pvt. Ltd.

In February 2013, Tamil Nadu Generation and Distribution Corp. Ltd tendered 1,000 MW of solar power at Rs.6.48 per kilowatt but received a lukewarm response with bids for only 500 MW.

“Today’s decision of the tribunal will give some more time for the high tension users to plan for solar energy,” said Amol Kotwal, deputy director of energy and power at Frost and Sullivan.

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