Wind power banking in Tamil Nadu is unbankable

The Tamil Nadu Generation and Distribution Corporation (TANGEDCO) wants power banking scrapped as around Rs.200 crore are being lost annually because of the facility.

Power banking is like cash banking whereby wind power producers feed in the electricity generated by their wind mills to the state grid and then draw that power for captive use within a year.

"Annually we lose around Rs.200 crore due to this facility. The wind mills generate power when the demand for electricity is low. The wind power producers draw the power produced when the demand is at peak. To meet our contractual obligation we buy power from the open market at a high cost and supply the wind power producers and lose huge money," a senior official at TANGEDCO, preferring anonymity, told IANS.

He said the power banking facility has to be scrapped totally or at least the banking period should be shortened for TANGEDCO’s financial stability.

Further, having around 7,000 MW of wind power capacity, which is around 50 percent of the total installed power generation capacity, is not good for the grid as it results in instability, he added.

Wind power generation peaks in the state during June-September and the banked power is used when the demand is at peak during the summer when the power prices also rule high.

The official said use of banked power during January-May should be scrapped.

TANGEDCO, burdened with an accumulated loss of around Rs.50,000 crore, now wants to plug its cash leakages.Wind power producers, however, demand continuation of the power banking facility though some are agreeable to a reduction in the period within which the banked power should be used.

Sunil Jain, chief operating officer of Green Infra Ltd, an independent power producer, told IANS: "Power banking has to continue. However it could be deliberated whether it is for one year or six or nine months. It should be at least for six months."

Not agreeing to any tinkering with the banking period, K. Venkatachalam, chief advisor, Tamil Nadu Spinning Mills Association (TASMA), told IANS: "In fact, we have sought for a change in the banking period from April-March to June-May for effective management. Wind season in the parts of Tamil Nadu starts by June and ends by October/November."

TASMA members account for around 3,500 MW of wind power installed in Tamil Nadu.

"TANGEDCO is not incurring any loss due to the banking facility offered to wind power producers," he argued.

Venkatachalam said during the peak season, wind energy is generated beyond the requirement and, therefore, harnessing such natural resource into energy and keeping it for use in lean months is the concept of banking and so it cannot be reviewed on commercial terms.