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Tangedco opposes ‘banking’ facility for wind power producers 

Credit:  M. Ramesh | The Hindu | www.thehindubusinessline.com 18 June 2012 ~~

The Tamil Nadu Generation and Distribution Company (Tangedco) has opposed the ‘banking’ facility for wind power producers, which it says results in a loss to it.

Banking allows the wind power producer to feed electricity into the grid and draw it at a time of its choice during the financial year.

Tangedco believes that due to the difference it pays the producers and the price at which it procures from the market to supply back to them, it sustains a huge financial loss.

It estimates that it is losing about Rs 1,000 crore because of this and the huge transmission and distribution charges it incurs in supplying electricity to the owners of the captive units, which pay only 5 per cent wheeling charges.

Issues letters to captive units

Tangedco has issued a letter to all the Chief Engineers to verify whether or not the ‘captive generating plants’ do conform to the rules. The letter asks the Chief Engineers to “take appropriate action for non-fulfilment of the norms.”

‘Captive generating units’ are those that produce power to supply to the owners of the units. To qualify to be called ‘captive units’ – and thereby get the benefit of concessional wheeling charges – they have to conform to two rules.

First, not less than 26 per cent of the ownership is to be held by the captive users and second, not less than 51 per cent of the annual electricity generated should be consumed by the owners.

Tangedco apprehends that the captive wind power producers are violating these norms. Industry watchers say that some companies have got around the ownership norms by using preference capital and convertible instruments.

A senior official of Tangedco told Business Line today that there was a mismatch between the supply and consumption of electricity by the captive plants – hence the directive to the Chief Engineers.

The official said that while the captive units pay only 5 per cent ‘wheeling charges’, Tangedco has to contend with ‘transmission and distribution’ charges of over 18 per cent.

Tangedco calculates that on the 6,000-odd million units of electricity generated by captive wind producers, it sustains a loss of close to Rs 500 crore.

“The situation has become unmanageable,” the official said.

Wind cartel?

Tangedco also believes that the wind turbine manufacturers are in a cartel, and that is responsible for keeping the turbine prices high. An official of Tangedco said as much in a presentation he made to the Tamil Nadu Electricity Regulatory Commission at a “stakeholders’ meeting” on June 8.

Tangedco believes that the price of wind turbines ought not to exceed Rs 4.50 crore a MW. Power project developers, on the other hand, feel that the turbine prices have gone up to between Rs 6 crore and Rs 7 crore a MW.

Here Tangedco finds some supporters. The Tamil Nadu Spinning Mills Association, whose members are wind power developers too, has said that it has asked disaggregated cost data of wind turbine manufacturers, and would approach the Competition Commission for redress if the manufacturers do not supply the data.

Source:  M. Ramesh | The Hindu | www.thehindubusinessline.com 18 June 2012

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

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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