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India

India

Better purchase prices for wind in Tamil Nadu

Development in India's leading wind state of Tamil Nadu looks set to take off again, following firm proposals by the state electricity regulatory commission to increase purchase prices to INR 3.40/kWh ($0.069/kWh) from today's INR 2.90/kWh ($0.059/kWh). The commission has been reviewing its rates after widespread industry criticism that the existing rate, introduced in 2006, is too low, especially with capital costs, interest rates and maintenance costs all escalating over the past two years. The new rate is expected to be implemented next month. Rangarajan Balajee of Auro Mira Energy Company's wind division says the better rates make investment in wind power attractive again in Tamil Nadu, especially if and when the central government expands the scope of its Generation Based Incentive, which currently pays INR 0.50/kWh ($0.010/kWh) to pilot projects of at least 5 MW for up to ten years, though capped at 49 MW if a project is bigger. With an expected carbon credit price of INR 1/kWh, Balajee says the pay rates in the wind state will be "mind-blowing." Installed wind capacity in Tamil Nadu has been static at around 4100 MW, but Balajee expects the market to grow once more.

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