June 27, 2012
India

Wind energy sector opposes Tangedco’s plan to do away with energy banking

Business Line | www.thehindubusinessline.com 27 June 2012

The wind energy sector in Tamil Nadu has objected to the State power utility blaming the system of banking of energy for its financial loss and planning to scrap the system.

The utility, Tamil Nadu Generation and Distribution Company (Tangedco), has blamed the system which provides for wind energy producers to bank the energy during the windy season and utilise it later.

The utility has said it purchases the power cheap during the season but when consumers use the banked power, the utility has to buy it from more expensive sources.

In a representation to the Tamil Nadu Electricity Regulatory Commission earlier this month, the officials said the system of energy banking has contributed to a loss of over Rs 1,200 crore. At the hearing organised by the regulator to hear stakeholders’ views on tariff for wind power, the officials said the utility should be allowed to do away with the banking.

This provision was created to encourage the wind energy sector. But with the installed capacity growing to over 7,000 MW in the State, such incentives were no longer needed.

The Indian Wind Turbine Manufacturers Association, which represents equipment manufacturers and their partners, the wind mill investors, has strongly objected to the utility’s stand on the issue.

The Manufacturers Association said in a statement such a move will stall the proposed wind energy capacity addition of over 5,000-7,000 MW over the next five years. Investors will move to other States such as Gujarat where a more favourable environment prevails.

The Tamil Nadu Spinning Mills Association, which represents wind mill owners who together have contributed to more than half the installed capacity in the State, has countered the utility’s stand quoting official statistics.

In a representation to the Regulatory Commission, the Association has said the utility buys expensive power from outside the State to compensate for its own shortfall in generation. For instance, Tangedco purchased power for 362 days between April 2011 and March 2012. It imposed load shedding for 336 days during this period, the Association said. There was no load shedding on the other days because Tangedco purchased power `actively’ and not because of excess generation from wind mills.

The total generation loss in the utility’s thermal stations and central generating facilities between May 2011 and April 2012 was over 10,718 million units. It bought 7,079 million units to compensate for this loss, according to the Association.

Also, between May and September 2011 when wind power generation was high, the utility continued to buy power to compensate for the prevailing shortage, the Association has said in its representation.

URL to article:  https://www.wind-watch.org/news/2012/06/27/wind-energy-sector-opposes-tangedcos-plan-to-do-away-with-energy-banking/