Marginal capacity addition casts a shadow over wind energy

April 9, 2014 by  
Filed under Green Energy News

Is the end of Tamil Nadu’s wind power “growth story” in sight? In a State that witnessed an unprecedented growth in the sector of wind energy not long ago, capacity addition during the just-concluded financial year of 2013-2014 was marginal, with 107 megawatt (MW).

The capacity of wind mills, which was around 2040 MW in April 2005, rose to 6,971 MW seven years later. This meant an average increase of 616 MW a year. In monetary terms, going by the Tamil Nadu Electricity Regulatory Commission’s approved figure of capital cost of Rs. 5.75 per MW, the State saw a capital investment of Rs. 3,540 crore every year.

During 2011-2012 alone, the increase in the installed capacity of wind mills was 1,083 MW. But, since then, the sector saw only an incremental increase. In the last two years, wind mills of a mere 282 MW were commissioned.

Interestingly, despite the Central government’s policy intervention last year, there has been little improvement. A generation-based incentive (GBI) scheme was reintroduced, but the capacity addition was modest.

A senior policymaker says the sector has been thriving on the basis of one sop — accelerated depreciation. Once this was withdrawn in April 2012, the sector has just crumbled, he says. Though industry does not accept this point, it has been demanding restoration of this concession.

Energy specialists A.D. Thirumoorthy and Vineet Vijayaraghavan acknowledge that the potential of the existing sites has almost been exhausted. In terms of land availability and supporting infrastructure in the present regions such as those in Kanyakumari, Tirunelveli, Theni and Coimbatore, the level of saturation is quite visible.

But, the president of the Indian Wind Power Association, K. Kasturirangaiyan, has a different take. It is not just in Tamil Nadu but also in other States that the rate of growth has gone down. The capacity addition nationwide was 3,200 MW a few years ago. Now, it should be around 1,500 MW.

However, the specialists say there is enormous potential for growth of the sector in the State. While Mr Thirumoorthy feels that with greater technological advances, the sector is bound to grow further, Mr Vijayaraghavan points out that new sites are being developed, and it will take a few years for transmission infrastructure to be put in place. Mr. Kasturirangaiyan reckons that the restoration of the benefit of accelerated depreciation will give the sector a fresh lease of life.

Combined installed solar power capacity up to 101 MW

A slowdown in the growth of wind power in Tamil Nadu may not mean the same for another area of renewable energy. The State witnessed the highest quantum of capacity addition in solar power.

In the just-concluded financial year of 2013-14, solar power units of 81 megawatt (MW) were added. This took the combined installed capacity to 101 MW. In the last one year, the units of 79 MW had been commissioned under the Renewable Energy Certificate (REC) scheme, while rooftop units of about 2 MW were put up, according to official data. A large chunk of the solar units has been put up by high-tension consumers, meaning big commercial and industrial establishments. Industry is upbeat about the development.

C. Narasimhan, president of the Bangalore-based Raasi group of companies, and Pashupathy Gopalan, president of Sun Edison-Asia, a U.S.-based multinational company, say that it is an indication of what is to come. Both say the growth could be many more times than what has been achieved.

Pointing out that there are tariff issues to be sorted out, Mr. Narasimhan calls for the intervention of the authorities to resolve them at the earliest.

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