Lack of encouragement hits wind power production

Though the state has the potential to generate 14,497 MW of wind power at 80 metre height, it is able to utilise the capacity to generate just 245 MW.

Published: 04th August 2012 09:36 AM  |   Last Updated: 04th August 2012 09:36 AM   |  A+A-


Though the state has the potential to generate 14,497 MW of wind power at 80 metre height, it is able to utilise the capacity to generate just 245 MW.

This is due to lack of initiative from the state government and the decision of the Centre for Wind Energy Technology to withdraw concessions to industrialists who want to set up wind power projects.

On the other hand, neighbouring Tamil Nadu, which has the potential of 5,374 MW of wind power, has set up projects to produce more than 6,000 MW.

Wind power can be generated between February and July, and will come in handy to the state government during the peak demand time when the state faces power shortage and resorts to shortterm power purchase.

Currently, the state is purchasing power at Rs 10 to Rs 15 a unit as part of short-term power purchase agreements.

But the recommended price of wind power is just Rs 5.42 a unit. Thus, the government can save power and money on short-term purchases of wind power. The Centre for Wind Energy Technology has recommended Rs 5.42 per unit for wind power but APTransco and Discoms are willing to pay only Rs 3.50 to Rs 4.20 per unit.

The low rate is discouraging industrialists from setting up wind power plants.

PLF- based tariff:

Compounding the problem, the Centre withdrew the Accelerated Depreciation (AD) and Generation Based Incentive (GBI) for wind power plants. Earlier, industrialists who had set up wind power plants could claim 100 per cent AD in their tax returns. Under GBI, industrialists were getting 0.50 paise extra per every unit. With the withdrawal of these two, industrialists now want tariff based on the plant load factor (PLF) for wind power.

The PLF for wind power plants in the state is around 12.56 per cent to 22 per cent. It varies from district to district. Power producers demand that the state be divided into three zones and tariff fixed on the basis of PLF.

For instance, the estimated PLF for wind power projects in districts like Nizamabad, Medak and Rangareddy is 20 per cent. In the Rayalaseema region, Anantapur has more PLF.

The Central Electricity Regulatory Commission (CERC) issued fresh guidelines on PLF-based tariff. If the PLF is 22 per cent, the unit cost to be paid to wind power plants should be Rs 5.42 per unit. If the PLF is 20 per cent, the rate should be Rs 5.96.

Industrialists argue that even if the state government pays Rs 5.50 per unit, the cost will remain the same for the next 25 years as the PPAs made with wind power producers will be valid for 25 years. Wind power producers argue that the proposed tariff by Discoms of Rs 4.20 per unit will not be helpful in the wake of the withdrawal of AD and GBI.

They say that wind power will be a boon to the state which is facing power shortage and is buying power at higher prices. If wind power can be fully tapped, there will be no need for the government to go in for short-term power purchases, they assert.

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