Tamil Nadu authorities bullish

Significant wind power development in the state of Tamil Nadu looks set to continue, despite fears of a slow down provoked by a three-year hiatus in wind market legislation. Authorities are bullish that with its new policy and market restructuring -- initiated as a result of the Electricity Act 2003 and the country's power sector reforms -- Tamil Nadu can maintain its position as India's leading wind development state.

Tamil Nadu has a strong grid infrastructure and a financially strong utility, a factor missing in other states. It is home to 990 MW of wind generation, 53% of India's total of 1869.5 MW. In the past financial year, 133 MW went up in the state, more than half the 241.3 MW installed in India. Even more growth can be achieved, authorities suggest.

Of the 40 sites identified for potential wind development in Tamil Nadu, just 17 have been exploited, says K. Allaudin of Tamil Nadu Energy Development Agency (TEDA). "With the government no longer giving us money for demonstration projects, we are now encouraging manufacturers to set up installations at three sites for which the state of Tamil Nadu will offer subsidies." Praising the role of emerging developers in the state, he says: "We will encourage turnkey projects by providing land, a major thrust in our promotional effort." Response has already been good, he adds, for projects in Rameshwaram Island, which has a high average wind speed of 10 m/s.

advisory role

With the State Electricity Regulatory Commission in the process of being established, the role of TEDA will continue to be an advisory one. "Our new thrust for wind energy will be to attract investors," says Allaudin. Sales of wind power directly to third parties, however, is unlikely to be introduced because of cross-subsidisation problems. "Besides, barring a fixed tariff, our policy has been consistent," he insists. R. Kannan of Tamil Nadu Electricity Board (TNEB) adds: "We do not want to erode our revenues by allowing third party sales."

With 16 dedicated substations in operation, the state is allowing project promoters to install five or six more in the next year to make room on the grid for 500 MW of new wind by 2005. According to Kannan, by March 2004, Suzlon, NEG Micon, NEPC and Vestas RRB will together install around 200 MW. German Enercon is also believed to be looking at a 100 MW project.

But while the state authorities are confident of attracting developers, the Wind Power Producers Association (WPPA) says better rates of pay are needed. It feels it was coerced into accepting the current INR 2.7/kWh (0.06/kWh) at a time when money was owed to wind producers. It is now asking the Tamil Nadu Energy Regulatory Commission (TNERC) for a wind tariff that measures up alongside those of other states.

"The power purchasing agreement signed up to in 2005 with Tamil Nadu was arbitrarily fixed. We are hoping they will agree to INR 3.30 per unit, in line with Rajasthan, which pays INR 3.32 ($0.073

/kWh) and Maharashtra's INR 3.50," says WPPA's G.V. Srinivasan.

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