Financial Daily from THE HINDU group of publications
Wednesday, Jun 19, 2002
Industry & Economy
TN: Higher tariff, priority tag sought for wind power
CHENNAI, June 18
THE Tamil Nadu Government should take steps to exploit wind power generation potential available in the State better by identifying it as a priority sector and enhancing tariffs, according to Mr S. Rajendran, Director, Non-Conventional Energy Equipment Manufacturers' Association of India.
Addressing newspersons here on Tuesday, he said the sales tax structure and entry tax affected the viability of the equipment manufacturers and power generators.
Responding to queries, he said that the Government had not adhered to the initial tariff rates and the escalation announced by the Ministry of Non-Conventional Energy Sources (MNES).
Last year, it had decided to pay Rs 2.75 per unit after much haggling, but that too was only on paper, and the actual tariff paid was only Rs 2.45 per unit, according to Mr Rajendran.
However, the MNES had announced Rs 2.25 per unit in 1995 with an annual escalation of five per cent. Further, the State taxes worked out to about 8 - 10 per cent, including the sales tax of four per cent and the entry tax levied on raw materials, components and spares.
The utility charges and banking charges were also higher compared to other States, he said.
The Tamil Nadu Energy Development Agency, set up to encourage power generation from non-conventional energy sources, did not have any powers, and was largely monitoring the flow of subsidies, he said.
Replying to a questioner, he said that while the TNEB was willing to pay up to Rs 4.40 per unit to power generated from conventional sources, it was cutting down on tariff paid to eco-friendly and sustainable power generation.
While the power generated was seasonal, it cannot be denied that the wind energy can be utilised to augment its generation capacity, and in the long run, it would help conserve fuel and environment. While the MNES has fixed the tariff, it was the State Electricity Board that utilises it. Further, it does not permit third party sale of power, which provides the investors scope to fix higher tariff for power, Mr Rajendran said.
According to the association, Tamil Nadu has an established capacity of about 900 MW of wind energy generation and the potential is estimated at 3,665 MW.
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