Tamil Nadu loses first place to Karnataka in generating Renewable energy

Renewable energy producers attribute the low capacity addition to the poor financial health of Tangedco and its delay in paying the dues to the wind and solar generators in the state.

A year after overtaking Tamil Nadu as the leading state in the country with its renewable sources installed capacity, Karnataka has now replaced Tamil Nadu as the largest producer of the renewable energy as well. Tamil Nadu had long been India’s top renewables energy producer. But, its capacity addition in the renewable sector has slowed down over the years.

The state’s renewable capacity went up from 10,625 megawatts (MW) in 2016-17 to 11,1165 MW in 2017-18 and it touched 12,646 MW in 2018-19. While the Karnataka’s renewable sector growth was phenomenal as its capacity went up from 7457 MW in 2016-17 to 13,829 MW in 2018-19. Karnataka’s growth was driven by the declining costs have helped build momentum around the uptake of renewables, especially solar.

In 2018-19, Karnataka unseated Tamil Nadu as the largest producer of renewable energy with the generation of 21,657 million units as against the latter’s 16,989 MU.

K Kasthurirangan, chairman of Indian Wind Power Association blamed the Tangedco for the declining capacity addition. “Wind power sector in Tamil Nadu was driven by the state’s policy of wind power banking. It allowed the wind power developers, particularly captive producers, to generate maximum power during the peak wind season and use the banked energy for their industrial use during the rest of the year. Now the newly installed windmills would not get wind power banking facility. The decision will not help Tamil Nadu and will be a deterrent to attract new wind installations in the state from captive users,” he told DT Next.

He said that despite having the highest charges for banking wind power, Tamil Nadu has now done away with it. “Gujarat and Karnataka continue to permit banking even while charging less than Tamil Nadu. This policy helps them attract more investors,” he said.

The veteran wind power developer said that the centre has reduced the investment allowance to 40 per cent from 80 per cent. “There is no conducive atmosphere for the wind power capacity addition,” he said.

Moreover, a wind energy producer said that non-payment of dues to the renewable power generators also drives away potential investors. “Across the country, Tangedco has due for nearly 20 months for the wind producers while it is nine months for the solar generators,” said the producer.

A senior official of a solar power company said that the delayed payment of the dues seriously impacts the financial condition of the companies as they have to service their debts. “Tamil Nadu has potential and infrastructure to remain at the top investment destination for the RE sector if it makes timely payment to the generators,” the official said.

After the disastrous response to the last two auctions of 500 MW each for the solar and wind projects, Tangedco, sources said, has decided to procure renewable power from the centre’s Solar Energy Corporation of India (SECI). “We are not going to conduct reverse bidding for wind and solar energy projects following power response to its tenders,” the sources said.

A senior Tangedco official said that steps are being taken to clear the dues for the renewable energy producers shortly. “We are confident of attracting more investors through the reverse auction to be conducted by the SECI,” he said.