Business

Biomass power units seek higher tariff

CHENNAI: The Biomass Power Plant Association has moved the Tamil Nadu Electricity Regulatory Commission (TNERC) seeking an immediate review of the tariff. The association’s plea to the commission comes in the wake of escalating costs, both fixed and variable ones.

In a memorandum to the commission, the association pointed out that production cost had gone up steeply to Rs. 6.80 as against Rs. 3.15 per kwh fixed in May 2005. Since they were paid uneconomic tariff, many biomass power plants (which together have a combined capacity of around 110 MW) were forced to operate at sub-optimal levels for the last one-and-a-half years. This in turn affected a wide spectrum of people, especially in the southern region, who were dependent on these plants for their livelihood.

With the grim power scene in the State, the association impressed on the commission the need to revise upward the tariff. A favourable ruling by TNERC, the association pointed out, would go a long way in helping the State to ease the power situation considerably. Cancellation of the existing PPAs (power purchase agreements) was very crucial for the high-tension (HT) consumers to receive power through the open access mechanism, the association said. In fact, the association had made a proposal to the State Government in June.

The proposal involved supply of power to HT units through the Power Trading Corporation under an open access intra-State mechanism. According to K. Raghu and Santosh Kamat, President and Secretary of the association, power purchased under an increased tariff would still be cheaper vis-À-vis any power imported from other States.

The association said the landed price of juliflora, an important input, had risen to Rs. 2,400 a tonne. Further, the financial charges and operational and maintenance costs had also gone up substantially, necessitating a re-look into the tariff structure, they said.

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