Wind energy tariff to be revised

By T. Ramakrishnan

CHENNAI, AUG. 1. The State Government has taken a decision in principle to fix the tariff for buying wind energy at Rs. 2.70 per unit. This price will be applicable to new units, according to sources in the Energy department.

A decision was taken at a meeting chaired by the Chief Minister weeks ago to review the working of power sector. At present, the price of purchasing power is Rs. 2.25 per unit and for new units with an escalation cost of five per cent per annum. This was fixed by the Electricity Board five years ago.

Wind energy promoters have been demanding that the present price of Rs. 2.25 be revised. Besides, the revision of the tariff was engaging the attention of the administration since the AIADMK Government assumed charge.

Tamil Nadu has been in the forefront of wind energy development and the existing installed capacity is 813 MW against the country's aggregate capacity of 1,340 MW. But, what is worrying energy experts is that of late, other States, particularly Maharashtra, have overtaken Tamil Nadu in terms of annual capacity addition.

For the last three years, Maharashtra has consistently been putting up wind mills of higher capacity than Tamil Nadu. In 1998-99, the capacity addition by the western State was 23.3 MW against Tamil Nadu's 17.8 MW. The next year, it was 50.3 MW in Maharashtra and 45.6 MW in Tamil Nadu. During 2000-2001, Maharashtra's performance was more than twice of Tamil Nadu's as the capacity addition in the former was around 111 MW and that of the latter 42 MW.

One of the reasons attributed for Maharashtra's better performance is its attractive promotional policy. Third party sale and 30 per cent capital subsidy are offered by the State whereas these features are absent here.

That the performance of Tamil Nadu had not been satisfactory was conceded by the Electricity Minister, Mr. D. Jayakumar, at a recent business meet organised by the Tamil Nadu Energy Development Agency (TEDA). He said the capacity addition in the last five years was only 140 MW and contrasted this with that of 1991-96, when new wind mills to the tune of 673 MW were installed.

The Energy department officials here point out that the Electricity Board is in a serious financial crisis and it cannot offer attractive packages provided in other States. They wonder why wind energy promoters should not go in for cost reduction as they otherwise get the incentives of tax holiday, 100 per cent accelerated depreciation and concession in custom duty.

For their part, a spokesman of the wind energy industry says it is not possible to effect cost reduction as they can recover their cost fully only after 20 to 25 years of operation of wind mills. This is because of seasonal variations associated with running of the machines. Under such circumstances, it is better if the Government continues to give incentives to the wind power sector.

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Section  : Southern States
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