Tamil Nadu is one of India’s most prosperous and industrially advanced states located at its southernmost extreme.The state has shown remarkable progress in the field on Wind Energy utilizing almost 80% of its Wind Power Potential with 40% of India’s total Wind Installations.With the right mix of policies,Tamil Nadu has also become the hub of Wind Energy Manufacturing with Global Heavyweights like Suzlon,Gamesa,Vestas all building plants in the State.A number of new players like Sterling Infotech and Lietner have also started manufacturing Wind Turbines in Tamil Nadu due to favorable networking effects.The state is also generates the 3rd largest amount of biomass energy with around 340 MW installed.Here are the reasons why Tamil Nadu has become the Biggest Renewable Energy State in India.
1) Tax Holidays and Subsidies – The government has given attractive subsidies to attract Wind Power Developers to the state.Rs 3.39 ( 8c/Kwh) is the tariff given to Wind Energy besides another 1c/Kwh received from the Federal Government as Generation Based Incentive (GBI).The projects in the state easily make 25-30% returns on their investment attracting a whole host of private industry developers.The Industry also gets a 10 year tax holiday,custom duty exemptions and accelerated depreciation boosting the returns even further.A 20 year PPA at fixed prices helps in building investor confidence .
2) Government Technical Support – The Tamil Nadu Energy Development Agency (TEDA) has mapped out the state’s wind power potential measuring wind intensities at different parts of the state.The government has also set up Centre for Wind Energy Technology (C-WET) at its state capital Chennai.TEDA helps in facilitating the setting up of Wind Farms.
3) Industry Networking – The availability of Wind Energy Equipment locally helps in reducing transportation costs,lowers maintenance costs and provide important information networking effects.
NEPC Micon and Vestas RRB were among the earliest wind turbine manufacturers in the country and both were Tamil Nadu-based. Thanks perhaps to that kick-start, a number of wind turbine manufacturers have set up shop in the recent years, to catch the evolving boom in wind energy, making Tamil Nadu a wind energy hub.
Gamesa of Spain is the world’s third biggest wind turbine company. Recently, it invested about €40 million in setting up a manufacturing facility at Chennai. The plant can produce 200 MW worth of wind turbines each year, but that is only for starters, because Gamesa expects to need to expand capacity.
Sterling (or Siva Ventures as it is now called) decided to back-end its takeover with a manufacturing plant at Chennai. The plant, put up with an investment of Rs 375 crore, can produce turbines of total 1,000 MW of wind power capacity annually. Currently, the plant will produce only 1 MW machines, but in about 18 months WinWind will introduce 3 MW machines.
Vestas, the world’s largest wind power company, was among the earliest entrants into the Indian wind power sector. Its joint venture, Vestas RRB, has successfully put up several wind mills all over the country. A couple of years ago, Vestas and RRB parted ways, which turned out to be good for Tamil Nadu, because both companies are now independently pursuing projects in the State.
Vestas has set up its technology centre in Chennai. The centre, spread over a more than 60,000 square feet area and located at TECCI Park, Chennai, will house Vestas Technology R&D’s future activities in India. The centre will play a vital role in Vestas’ global, long-term dedication to R&D in cooperation with Vestas’ technology centres in Denmark, the UK, Singapore and the US.
Shriram EPC, part of the Chennai-based Shriram Group, has joined hands with Leitner of Italy to set up a Rs 200-crore facility to produce gearless wind turbines. Leitner Shriram has a capacity to produce 150 units of 1.5 MW gearless wind turbines annually at the integrated facility which can manufacture the entire turbine, including the critical components, generator, controls and nacelle.
RRB Energy, once a part of Vestas RRB, has its blade manufacturing plant near Chennai. The company now intends to invest Rs 100 crore in the next 18 months to expand its production capacity. This investment, coming on top of the just-concluded first phase of investments of Rs 65-crore, will increase manufacturing capacities of turbines and blades.
4) Huge Unmnet Energy Demand – Tamil Nadu is a power deficient state like most of the other states in India.With blackouts ranging from 3-6 hours a day,Electricity is a very valuable commodity.Wind Power is essential in the summer months when demand for power exceeds supply by a huge amount.
5) Regular Payments by State Electricity Boards – One of the biggest impediments faced by IPPs in India is the poor financial health of the SEBs.These Electricity Distributors are poorly managed and run frequently delaying even defaulting on payments to suppliers of electricity.However Tamil Nadu SEB has made payments regularly leading to greater confidence amongst Wind Investors.
With Tamil Nadu showing the way,Gujarat and Maharashtra the other two Industrially Powerful States in India have also started to push Green Energy in a big way.The state continues to attract a huge amount of Renewable Energy Investment with new wind farms being planned despite reaching 80% of its potential.Orient Green Power plans to build a massive 300 MW Wind Farm in the near future.The government is rolling out subsidies with grants to be given to hybird wind solar plants in the region.Tamil Nadu has served as the poster boy for Green Energy in India and continues to lead despite achieving such high targets.