Cut in rate, banking period irk wind energy producers in TN

The government has fixed Rs 2.86 per unit as the procurement price for wind power from April this year, which is much lower compared to the Rs 4.16 per unit that was being paid for the last two years. 

Besides, Tangedco has also announced that the banking facility for new players would be provided only for a month, while it would continue for the older companies for two more years. 

Wind power generation is seasonal, available only from June to September. The banking system allows wind energy producers to supply excess power into the grid and draw it for consumption within a year. This is particularly useful for the companies that own other industries like textile mills and others. 

“When investors were invited to generate wind power, they were assured of the banking facility. Several companies came forward to produce wind power because of the offer. Cancellation of the facility will result in losses for them. Besides, new investments will not be flowing into the wind energy sector, if the banking system is cancelled,” said a member of South India Mill Owners Association. 

However, Tangedco officials say their opposition to the banking system is due to the burden that the commitment entailed, especially during the peak demand period when there it does not have any surplus. This forces the state utility to purchase power at peak tariff to honour the commitment to the private firms, resulting in losses to Tangedco. 

He added that other states rich in renewable energy such as Andhra Pradesh, Gujarat, Maharashtra, Rajasthan and Karnataka have imposed more restrictions on wind energy banking when compared to Tamil Nadu. 

“The procurement price of wind power is revised once in two years. This year, a draft report was prepared fixing the charge as Rs 2.86 per unit and it was circulated for discussion. After eliciting the views, the procurement price was fixed,” the official said about procurement prices.