Wind power tariff Hiked !

The Tamil Nadu Electricity Regulatory Commission (TNERC), after ten months of consultations with stakeholders – the independent power producers (IPPs), TN electricity board (TNEB) and consumers – has hiked the tariff for procurement of wind energy from Rs.2.90 per unit to Rs.3.39 per unit effective from 1-4-2009. The last tariff hike was in 2006, following which TNEB struck 20-year power purchase agreements (PPA) with the IPPs. This tariff revision would appply for new PPAs and for those IPPs installed after September 15, 2008, which comprise about 100 MW of present installations. Tamil Nadu had attracted substantial investment in wind energy and it accounts for 43% of the installed wind capacity in the country ( 4133 MW out of 9586 MW).

Though wind power contributed to 11% of consumption in the state in the monsoon months when TN was going through a severe power crisis, the source becomes seasonal. “When we work out whether the hiked tariff would be agreeable to us, we also have to factor in the cost of establishing evacuation infrastructure of each IPP, considering the source is available only for four months in a year” said TNEB chairman C P Singh. The distribution agency is yet to decide on the viability of the new tariff, and can appeal to TNERC or an appellate tribunal. Apart from encouraging wind farms to operate their units more, this hike is also expected to make TN more attractive to investors over neighbouring states. “Maharashtra, Gujarat and Karnataka have, of late, been attracting investments and one of the reasons is the attractive tariff offered by them,” a communiqué from TNERC said. “The revised power tariff is lower than Maharashtra and Karnataka and marginally higher than Gujarat and Andhra Pradesh.” Indian wind turbine manufacturers association (IWTMA) task force member N Ramani had told earlier the additional wind capacity installed per year has been declining for the past three years, coming down from 857 mw in 2005-06 to 395 mw in 2007-08. But, his prediction that there would be an addition of 600-700 mw at an investment of Rs 3000 - 4000 crore by 2009-10 is now on shaky grounds due to slowdown in the economy. “This may not fetch investments right away, but TN will regain its competitive advantage among its neighbouring states. We asked for Rs.3.40 and we got Rs.3.39; we welcome the move,” said IWTMA chairman D V Giri.

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