TN power regulator for curbs on wind power banking as discom losses mount

Captive wind power generators including the mills in Tamil Nadu are likely to face restrictions on banking their excess production with the discoms, as the power regulator has proposed limiting generation to no more than the annual average consumption. 

Of the 7,900 Mw of wind power capacity in Tamil Nadu, which is the largest in the nation, almost 70 per cent or around 5,500 Mw is under captive generation. 

The banking of excess power generated by wind power producers was a measure the government adopted years ago to promote clean energy, but with the State becoming energy surplus, the government-owned discom TANGEDCO says it is bearing losses due to the additional cost in banking. The Tamil Nadu Electricity Regulatory Commission (TNERC) is now considering a new tariff order for wind energy, based on this submission by TANGEDCO.

"Banking has always remained a bone of contention between the licensee and wind energy generators (WEGs)," TNERC observed in its new consultative paper. 

In the consultative processes undertaken by the Commission before the issue of every tariff order, the distribution licensee has always requested for the removal of the facility of banking provided to WEGs. Wind energy generators, on the other hand, have raised concerns about the investments they have already made in banking provision and cited principles of promissory estoppel. 

TANGEDCO has often stated that banking is detrimental to its finances and has caused heavy losses due to power purchase cost in the non-wind season and additional expenditure in the form of integration cost in the process of accommodating wind energy by backing down and surrendering power. The WEGs have been contending that banking is necessary and should be continued, and that there is no financial loss to TANGEDCO. They have also approached various legal forums against the orders on banking.

"The rise in captive installations is a cause for concern with respect to the facility of banking of energy," TNERC observed. "The Commission  proposes that the captive wind power plants shall restrict the installed capacity such that there is no excess generation beyond the annual average consumption, say taken for two or three years."

The Commission also draws comparisons with other renewable energy-rich States such as Andhra Pradesh, Gujarat, Maharashtra, Rajasthan and Karnataka. It says they have all placed much larger restrictions on banking of wind energy than Tamil Nadu.

TNERC has suggested various options, including doing away with the facility  of banking, but with deemed purchase of excess generation, or banking facility with a restriction on timing from one month to 12 months, with various riders and charges. It also recommends removal of banking of energy for third party power purchases. 

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