Date:17/12/2008 URL: http://www.thehindu.com/2008/12/17/stories/2008121760130700.htm

Tamil Nadu

Wind energy tariff to be increased

T. Ramakrishnan

Electricity Regulatory Commission plans to hike it from Rs.2.90 a unit to Rs.3.40

It will be applicable to wind energy generators that will be commissioned in future
The rate is based on the assumption that project capital cost will be Rs.5.35 crore

CHENNAI: The Tamil Nadu Electricity Regulatory Commission (TNERC) proposes to increase the tariff of wind energy (to be purchased by the Tamil Nadu Electricity Board from promoters of wind energy generators) from Rs.2.90 a unit to Rs.3.40.

The current rate was fixed in May 2006. Comments or suggestions are invited on or before December 28, says a consultative paper prepared by the TNERC.

The proposed tariff will be applicable to new wind energy generators (WEG) that will be commissioned in future. The rate is based on the assumption that the project capital cost will be Rs.5.35 crore, with a plant life of 20 years. It is planned to reduce the control period from three years to two.

As for revision of rates for existing wind energy generators, the Commission has retained the rates for now and will take a view after collecting exhaustive data on decline of efficiency of old wind energy generators and de-rating of their capacity utilisation factor from the Wind Mills Association and the TNEB.

The paper states that for the past one year, wind turbine manufacturers, wind energy developers and wind energy generators had repeatedly represented that input costs such as capital cost, interest rates and maintenance cost had spiked in the past two years. They requested the Commission to revise the tariff before the control period of three years. In the past few years, the capacity addition of wind generation in the State declined, whereas States, including Gujarat, had registered an increase.

Making another assumption that the Board is purchasing 35 per cent of the total wind energy generated, the TNERC has concluded that wind energy purchased accounts for 4.08 per cent of the Board’s total consumption.

In the next tariff order, the Commission proposes to fix 7.5 per cent as the minimum purchase obligation by the distribution licensee (the Board). It has sought suggestions as to whether the Commission should fix a maximum or a minimum on purchase obligation. “Should we fix a total percentage for all the NCES [non-conventional energy sources] power put together or category-wise percentage?”

Stating that the Board has lodged a petition with the Commission to temporarily relinquish the cross subsidy surcharge for third-party purchase by industrial and commercial consumers to promote generation from renewable energy sources, the Commission has made another proposal for fixing the surcharge at 50 per cent of the level prescribed for generation from conventional energy sources.