The Hindu Business Line : Wind power industry unhappy with TNERC tariff order

New tariffs
Wind turbines already selling power- Rs 2.75 a unit
Wind turbines to be set up hereafter- Rs 2.90 a unit
Power from biomass, bagasse-based cogeneration plants- Rs 3.15 a unit
Fossil fuel-based captive power plants- price band of Rs 2.10- Rs 3.45 a unit

Chennai , May 16

Wind turbines selling power to the Tamil Nadu Electricity Board will henceforth get Rs 2.75 a unit, a 5 paise increase over the existing tariff.

However, wind turbines to be set up hereafter will get Rs 2.90 a unit for the electricity they sell to the electricity board.

The Tamil Nadu Electricity Regulatory Commission (TNERC) has given these directions in the tariff order it has passed for buying power from non-conventional energy sources, including wind power, biomass and bagasse-based cogeneration.

In its order passed on May 15, the commission has classified wind turbines into two categories: those commissioned and to be commissioned based on agreements entered before this order was issued and those projects to be commissioned based on agreements to be entered into hereafter.

Higher tariff sought

The wind power industry is unhappy with the order. During the public hearings, the wind power industry, including the turbine manufacturers and those companies that had invested in wind power, had argued for a higher tariff.

The industry had cited the rates being paid in Maharashtra and Karnataka and wanted the tariff to be fixed at a minimum of Rs 3.32 a unit.

wheeling charges

The commission has retained the wheeling charges at 5 per cent. That is, if a company that has set up a wind turbine for captive use feeds 100 units into the grid, it will be able to use 95 units at its site.

Reacting to the order, Mr U.B. Reddy, General Manager - Business Development and Operations, Enercon India, a wind turbine manufacturer, said a tariff of at least Rs 3.10 a unit would have helped in getting more investments in the wind energy sector in Tamil Nadu.

The regulatory commission has fixed a tariff of Rs 3.15 a unit for power purchased from biomass (which is the price that the electricity board pays now) and has also retained the tariff for bagasse-based cogeneration plants at Rs 3.15 a unit.

The TNEB buys power from bagasse-based cogeneration plants at Rs 3.15 a unit during the crushing season and Rs 3.01 a unit during the non-crushing season.

In a separate order, the regulatory commission has fixed a price band of Rs 2.10 to Rs 3.45 a unit for power to be purchased by the electricity board from fossil fuel-based captive power plants.

The price will be determined by the time of day when the captive plant sells surplus power to the grid.

Captive plants in State

According to the commission, there are 26 operational captive generation plants in Tamil Nadu with a total capacity of 640 MW. Six more captive plants are in the pipeline with a total capacity of 226 MW.

The Tamil Nadu Electricity Board purchased 650 million units of electricity from captive plants in 2004-05 at an average price of Rs 2.90.

According to the commission, Tamil Nadu's total generating capacity as on March 31, 2006 is 10,011 MW, including its share from Central generating stations.

The State has an installed wind power capacity of 2,912 MW. About 65 per cent of wind mill developers are under wheeling category (that is they use the power themselves) and the balance 35 per cent sell to the grid.

The commission has also issued another order permitting open access of the TNEB's transmission lines, on payment of relevant charges.