Nilgiri private firm’s micro hydro plant gets TNERC nod
The Commission's decision comes after a prolonged delay in executing a power purchase agreement (PPA) and amid the absence of a fixed tariff for small private hydro projects in the State.
CHENNAI: To promote green energy generation in the State, the Tamil Nadu Electricity Regulatory Commission (TNERC) has granted permission to the United Nilgiri Tea Estates Co Ltd to operate its 60 kW mini hydroelectric power plant at Korakundah Estate, Nilgiris District, for captive consumption.
The Commission's decision comes after a prolonged delay in executing a power purchase agreement (PPA) and amid the absence of a fixed tariff for small private hydro projects in the State. The petition filed by the estate sought relief on the grounds of equity and public interest, particularly given the plant's potential to produce clean, renewable energy.
The plant, fully commissioned and ready in April 2023, was developed with the approval of the Government of Tamil Nadu under GOMs No 44, dated September 3, 2021. Although the petitioner initially intended to sell the power to the Tamil Nadu Generation and Distribution Corporation (Tangedco), the lack of progress from the utility prompted a request to operate the plant solely for in-house power needs.
In its final order, the Commission acknowledged that while the original GO conditions included a mandate to sell the entire generated power to the distribution licensee and to pay a 25 per cent royalty on the market value of power, the petitioner's shift to captive usage was reasonable and aligned with past High Court decisions.
The commission said that the hydropower plant is permitted to operate in standalone captive mode. “If the petitioner opts to connect the plant to the State grid, they may apply for grid connectivity following TNERC's Grid Connectivity and Intra-State Open Access Regulations, 2014. All other conditions in the original GOMs No 44, including royalty payments, remain in force,” it said.
The order criticised the "stoic silence" of the Superintending Engineer, Kundah, who had not responded to multiple communications from the petitioner, despite the plant being ready for over two years. TNERC emphasised that the lack of tariff fixation by the State should not hinder renewable energy initiatives.
The decision comes on the heels of the state's release of its first State Hydro Power Policy in August 2024, encouraging the development of hydropower projects in the 100 kW to 10 MW range and promoting private participation through streamlined approvals, royalty frameworks, and assured connectivity.
The United Nilgiri Tea Estates project is one of the few private-sector hydro initiatives in the State. Another notable example is the 350 kW hydro project at Thuklapatti, near Madurai, operated by Dazzle Power Private Limited, which sells electricity to Tangedco under a previously signed PPA.
