New issues faced by the Indian Wind Capital – Tamil Nadu

Lack of transmission and grid issues have always plagued renewable energy around the world. Green Energy is at an
inherent disadvantage because of its intermittent nature of generation. Utilities do not like to buy green energy from others, as it reduces their revenues plus they have to give free energy storage to RE developers. Renewable energy also requires new grid infrastructure to transport RE from remote areas to the main consumption regions in cities etc. China has faced numerous problems in the past as the country installs nearly 50% of the world’s total capacity in a year. There have been numerous reports of gigantic wind farms in China’s western regions lying idle for lack of transmission capacity.

India too is now facing the problem especially in Tamil Nadu which has almost 50% of the country’s total 20 GW of capacity. Tamil Nadu’s wind developers are looking to sell their wind farms as they are unable to sell the electricity, due to inadequate infrastructure provided by TANGEDCO. These developers are also facing the problem of late payment by the state owned utility. Many developers are going for a distress sale of assets. Large new wind players such as ReNew and Greenko might take this opportunity to buy RE assets on the cheap.

Read on GWI List of Wind Energy Companies in India.

The Indian Wind Industry was already suffering from a lot of problems in the last year, which led to a sharp drop in the wind energy installations in India. Now the wind saturated state of India, Tamil Nadu is faced with newer transmission issues to add to its woes. Given below are some of the problems plaguing the Indian Wind Industry in 2012.

Problems Faced by Wind Industry in India in 2012

i) Removal of Accelerated Depreciation and GBI.

ii) Collecting of dues from the state distribution utilities.

iii) Problem of working capital with payment delays of more than a year.

iv) Capital escalation of costs with the prices of materials like steel and cement showing a sharp appreciation leading to a 30-40% increase in the cost of wind farms.

v) Tangedco, the distribution utility threatened to remove the “banking facility” to the wind energy producers which allowed them to sell power at a time when the electricity prices were high.

Read more about Wind Energy Woes in India.