India

India

Tariff frustration in Tamil Nadu -- Leadership threatened

The wind power tariff in the south Indian state of Tamil Nadu is to remain below that in other states. It has been increased by just INR 0.005-0.020/kWh. A disappointed wind industry had expected a hike to at least INR 3.32/kWh ($0.072/kWh), in line with tariffs in Maharashtra and Karnataka.

The Tamil Nadu Electricity Regulatory Commission (TNERC) is now classifying wind turbines into two categories: those commissioned based on agreements entered before May 15, 2006 and those with agreements after that date. For turbines already selling power to the Tamil Nadu Electricity Board (TNEB), the price is hiked to INR 2.75/kWh ($0.059/kWh), an increase of INR 0.005/kWh. The rate for power from new turbines is INR 2.90/kWh ($0.063/kWh.)

Charges for wheeling the electricity across the TNEB wires are kept at 5% of the value of the power fed into the grid. About 65% of Tamil Nadu's 2912 MW of wind capacity generates directly for the owner of the turbines and is subject to wheeling charges. The remaining 35% is sold to TNEB.

Indowind Energy's Rangarajan Balajee says a 20% increase in the rate paid for electricity for all new installations is an improvement, but it nonetheless took 13 years to happen and is still lower than the tariff in other states. In Karnataka, the rate is INR 3.40/kWh plus guarantees of an INR 0.002/kWh annual escalation. "The government should really wake up and do something about this," says Balajee.

Challenge

While Tamil Nadu was India's pioneer wind state and is still leading in terms of installed capacity, that might not last for long, says Balajee. "It should know what other states are doing to challenge us," he says. "If the state is serious, then it should start improving the infrastructure such as enhancement of grid, which is a big concern for the industry, and look at other immediate facilities rather than bask in the glory of the past." Sarvesh Kumar of Vestas is more nonchalant. "Something is better than nothing," he says.

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