Tamil Nadu should increase its solar and wind energy capacity, suggests study
Chennai: Tamil Nadu should consider doubling its wind energy capacity and increasing its solar capacity six-fold, instead of building expensive coal-fired power plants, said a report published by the Institute for Energy Economics and Financial Analysis (IEEFA).
The report, titled ‘Electricity Transformation in India: A Case Study of Tamil Nadu’, was released on Wednesday and highlighted how Tamil Nadu is building 22,500MW of expensive coal-fired power plants despite the favourable investment and electricity tariff costs for renewable energy.
“Tamil Nadu should double its wind energy capacity to 15GW and increase its solar capacity to 13.8GW by 2026-27 to deliver cheaper electricity to customers,” the report said.
It also mentioned that adoption of renewable energy would restore debt-ridden Tamil Nadu Generation and Distribution Corp. (Tangedco) to a profitable status.
Tangedco reported a staggering loss of Rs13,985 crore in 2013-14. Subsequent reforms under UDAY scheme helped Tangedco reduce its losses to Rs3,783 crore in 2016-17. It has also reduced the deficit on energy availability from 12.3% in 2011-12 to a record low of 0.6% in 2015-16. IEEFA expects a break-even result next financial year, then moving to net profit for the first time in two decades.
The report by IEEFA also warned that projects like the Cheyyur Ultra Mega Power Plants are likely to remain “nothing more than a stranded asset proposal”.
Tamil Nadu can leverage its already leading renewable energy base to drive new investment and employment opportunities in high-tech industries of the future, which would also be a profitable revenue source for Tangedco, the report said.
Tamil Nadu does not need any net new thermal power capacity additions in the coming decade, it said, as building net new thermal capacity would further depress existing low utilisation rates and create further financial distress for the thermal power sector.
Stating that Tamil Nadu is the leading state in India in terms of installed wind capacity, making it also one of the top states globally behind only a few provinces in China and Texas in the US, the report said, Tamil Nadu has temporarily slipped to the third position in terms of commissioned solar infrastructure in India.
“But the very successful 1.5 GW solar tender of July 2017 will see Tamil Nadu vie for leadership again by the end of 2018-19,” it said.
Talking about the state’s wind energy, Tim Buckley, IEEFA’s director of energy finance studies, Australia, said: “Despite being a world leader in wind energy, Tamil Nadu’s wind farms have aging and outdated technology. Upgrading the existing turbines alone could double the state’s leading wind energy capacity.”
By 2026-27, IEEFA forecasts that 67% of installed capacity and 56% of electricity generation in the state will be derived from zero emission technologies.
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