But a stagnation in wind energy generation and payment delay might derail this
A 2018 report lists Tamil Nadu as one of the top nine renewable energy markets in the world. Today, 14.3 per cent of all the energy demand in the state is met by renewable energy, primarily solar and wind.
Wind power capacity in Tamil Nadu increased from a meager 877 MW in 2002 to 7,652 MW in 2017. Persistent load shedding by the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) has been a huge problem for the local industry. The policies and incentives offered by the government — bundling of wind power projects, accelerated depreciation, a Technology Upgradation Fund etc — have driven the state’s power-intensive industries to invest in captive wind power plants. Of the total capacity today, nearly 5,500 MW36 of captive plants have been set up by textile mills and cement industries.
The Tamil Nadu Spinning Mills Association (TASMA) was an early adopter of the ‘bundled wind project’ model—several small power consumers formed cooperatives to invest in wind turbines. Today, TASMA cooperatives own a total of 3,500 MW of wind energy capacity, 45 per cent of the state’s wind-generation capacity.
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But the wind generating capacity in the state has stagnated since 2012.
Even the reintroduction of accelerated depreciation could not revive the regional wind market. This can be attributed to evacuation problems, history of curtailment and payment delays, all of which are acute in Tamil Nadu because of the large shares of renewable energy in its power mix. A TASMA official said, “The curtailment averaged around 30-35 per cent of the generation in the peak season during 2012-15 and averages at 20-25 per cent today. A conservative figure of 15 per cent back down translates to an annual loss of 2,000 to 2,500 million units.”
TASMA has filed a case to ensure compliance of a must-run provision for windmills. The Association claims that the older wind turbine generators with higher tariffs were curtailed more compared to the newer, more efficient ones and payments continue to be delayed by 12-18 months.
Wind generation peaks during the southwest and northeast monsoon months, followed by below average generation for the remaining months. The state introduced banking of energy, which allows the cooperatives to supply to the grid when there is excess generation, in exchange for free supply during low generation periods. According to TASMA, TANGEDCO seldom honours these banking obligations since power purchase costs are high during the low generation period.
Addressing these challenges should be the priority; if that is not done, they can wreak havoc in the renewable energy industry. While these issues are more serious in Tamil Nadu, they are slowly creeping into the other high potential states of India as well, since discoms across the country are struggling with poor financial health.
Serialised and excerpted from the upcoming The State of Renewable Energy in India published by the Centre for Science and Environment. To get a copy click here
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