US-based Institute for Energy Economics and Financial Analysis (IEEFA), which conducts research and analyses on financial and economic issues related to energy and environment, on Wednesday ridiculed Tamil Nadu’s coal-fired thermal power expansion plans and said the State had the potential to double its wind energy capacity by 2027 and increase its solar capacity six-fold.
The IEEFA has published a report, “Electricity Transformation in India: A Case Study of Tamil Nadu” which sees Tamil Nadu’s wind-generation capacity reaching 15 gigawatts (GW) of capacity in less than 10 years and solar energy totalling 13.8 GW.
“The upshot is cheaper electricity for customers and a return to profitability for TANGEDCO (Tamil Nadu Generation and Distribution Corporation),” said Tim Buckley, IEEFA’s director of energy finance studies, Australasia, and lead author of the report.
“IEEFA bases its forecast on a clear tipping point achieved in 2017: new renewable investments are being underwritten at tariffs of `2.43-3.00/kilowatt-hour (kWh), below the average tariff paid to the NTPC, India’s largely Central government-owned power generator, for thermal power in 2016/17 of Rs3.20/kWh,” Buckley said. Buckley noted that Tamil Nadu accounted for almost one-fifth (18.5%) of India’s total renewable energy generation in 2016/17. TN population is approaching 68 million.
The report finds that Tamil Nadu already operates the most diversified electricity generation fleet in India, with renewables representing 35% of installed capacity as of March 2017, nuclear 8%, and hydroelectricity 7%. Coal-fired power capacity represents 45% or 13.4 GW.
The report sounds a warning, however, on how Tamil Nadu is building 22,500 MW of expensive coal-fired power plants-almost double the entire existing coal-fired fleet in the state-in spite of the favorable investment advantages and lower tariff costs for wind and solar.
“Building more non-pithead coal-based plants at a time when existing plants are being used only 62% of the time as opposed to the optimal 80% makes no sense,” Buckley said. “This will be borne out in time with the cancellation of many new, costly coal-based plant proposals such as the 4,000 MW Cheyyur UMPP.”
The report concludes that TN would be better served by a more diversified electricity-generation mix, which is well within reach if certain policy and investment programmes are pursued.
“Such a programme would allow TN power utility to turn profitable without undue impacts on consumers,” Buckley said. “Despite being a world leader in wind energy, Tamil Nadu’s wind farms have aging and outdated technology. Just upgrading or repowering existing turbines could double the state’s wind-energy capacity.” TANGEDCO reported a staggering loss of `13,985 crore in 2013/14. Subsequent reforms under UDAY scheme have helped not only reduce losses, to 3,783 crore in 2016/17, but lower its deficit in energy availability from 12.3% in 2011/12 to a record low 0.6% in 2015/16.