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Green energy to come at a cost, say experts  

Credit:  Chittaranjan Tembhekar, TNN, The Times of India, timesofindia.indiatimes.com 19 March 2011 ~~

MUMBAI: Power consumers may have to pay an additional 3% as suppliers are mandated to increase the quantum of renewable energy in their overall supply by 1% every year. The quantum will go up to 9% by 2015-16.

The Maharashtra Electricity Regulatory Commission ( MERC) has made it mandatory for utilities to procure 0.25% to 0.50% solar power and the rest from other renewable resources like biogas, wind energy and hydro power.

But the tariffs for renewable energy are high: Rs 17.91 per unit for solar power and Rs 5.07 per unit for non-solar power like wind energy. The objective behind the obligation is to reduce carbon footprints and simultaneously attract more investment and players in the field of renewable energy. But this is likely to come at a cost for consumers.

Power expert Ashok Pendse said that if solar power is bought through the NTPC, the price will be an affordable Rs 7 to Rs 8 per unit. “In this case, the tariff hike for consumers will be just up to 1%. But buying solar power from other sources would not be an affordable proposition.”

D Radhakrishnan, another expert, said that as per studies by the credit rating agency CRISIL, an increase in the renewable energy component by 6-9% over the next five years will not increase the tariff by more than a paisa per unit.

However, he says there should be proper scrutiny of the tariff and renewable resources so that consumers are not burdened more than the required. He said use of renewable energy will be unavoidable looking into grim fuel scenario in the world.

“Considering the non availability of adequate renewable energy capacity the overall power procurement cost for all the utilities in state is likely to go up; thus, making power consumers in the State pay more,” differed another expert in power sector. He said increasing decentralised renewable power generation models in certain pockets of Mumbai region and overall state will reduce the burden of costly power on urban areas and efforts be made in that direction.

If considered the demand of around 8,900 million units of renewable energy in suburban Mumbai where power supply is dominated by Reliance Infrastructure (RInfra) with 27 lakh consumers, the total cost of buying renewable energy will come to around Rs 100 crore which means an increase in tariff by minimum 12 paise to 20 paise per unit over a period of five years. However if considered solar at Rs 7 to 8 per unit then the increase would be negligible 4 paise to 6 paise per unit.

Source:  Chittaranjan Tembhekar, TNN, The Times of India, timesofindia.indiatimes.com 19 March 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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