After Solar, TN Commission Issues Details for Wind Power Procurement

The Tamil Nadu Commission has issued a consultive paper discussing the approach for procurement of wind power by Discoms and related issues of open access.

The Tamil Nadu Electricity Regulatory Commission (TNERC) has issued a consultive paper discussing the approach for procurement of wind power by the Distribution Licensee (Discoms) and on related issues of open access.

As per the paper, India is the world’s fourth-largest wind power producer with a total installed capacity of 37.5 GW as of December 31, 2019. And of that total, Tamil Nadu is the largest producer of wind power with a State-owned capacity of 8506 MW.

The commission noted that for the previous tariff order for wind power was issued in 2018, the control period expires on March 31, 2020. In lieu of which it has now issued this new paper, with its proposals and invited comments and suggestions from industry stakeholders until March 14, 2020, on the same.

As per the paper, the commission has observed that tariffs obtained by state agencies and national agencies like the Solar Energy Corporation of India (SECI), in the biddings have been competitive and are reflective of the market. And has thus proposed that the procurement of wind power by the Discoms, for compliance of RPO requirement, should be done through the competitive bidding route under section 63 of the Electricity Act of 2003.

Furthermore, the Power Purchase Agreement (PPA), billing and payment shall be as per the terms in the bidding. And, sharing of CDM benefits shall be at 100 percent in the first year and thereafter reduced by 10 percent every year till the sharing becomes equal(50:50) between the developer and consumer.

The paper also states that wind energy is in a position to compete with conventional power sources and thus can be treated in the manner related to conventional power. In view of the above reason, the Commission had fixed the transmission, wheeling and scheduling and system operation charges at 50 percent of that applicable for conventional power as notified by the Commission from time to time. And has now proposed that the transmission, wheeling and scheduling and system operation charges be 100 percent of that applicable for conventional power as notified by the Commission from time to time for the Wind Energy Generators (WEGs) commissioned under the normal category and in respect of the WEGs availing Renewable Energy Certificates (REC).

For cross-subsidy surcharge, the commission has proposed a levy of 100 percent of cross-subsidy surcharge of that applicable to conventional power. And with regards to the security deposit to be paid by captive/third party user, the Commission has proposed to retain the present arrangements i.e. charges corresponding to two times the maximum net energy supplied by the Discoms in any month in the preceding financial year shall be taken as the basis for the payment of security deposit.

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Recently, the TNERC had also issued a similar consultative paper discussing the approach on procurement of solar power by the Distribution Licensees (Discoms) and on related issues of open access. The last date for submitting comments on that paper is March 13, 2020.

PC: EDF