Tamil Nadu’s prescience led it on the wind energy route long before it became fashionable to talk about it. In 1986, it launched a pilot project, and that enabled the State to become an early prominent player in the generation of green and sustainable energy. While other States have slowly gained ground in the race, with the constitution of the Tamil Nadu Green Energy Corporation Limited (TNGECL), the State is attempting to be a forerunner again in the renewable energy sector. Previously, wind was the only energy source that was termed renewable. The emergence of solar power — widely suited to the local climatic conditions — and the creation of batteries for storing the energy, several proposed hydro projects, and offshore wind mills have heralded a new age in Tamil Nadu’s energy scenario. The government then decided to create a separate entity by spinning the Non-Conventional Energy Sources Department off Tamil Nadu Generation and Distribution Corporation (Tangedco) and merging it with the Tamil Nadu Energy Development Agency. It is a separate venture for exploring renewable energy plans.
The State has a total green energy generation capacity of 34,700 megawatt (MW). This is more than 50% of the energy mix. Of it, wind energy capacity accounts for 10,500 MW, solar 7,360 MW, and hydro 600 MW. Co-generation accounts for 500 MW. The State has permitted private players in the wind and solar sectors, and the Energy Department has set an ambitious target of 15,000 MW of hydro-power generation through pumped storage.
A slew of projects
A senior official of Tangedco says several hydro-power projects and projects for strengthening the green energy transmission corridors have been lined up. The government has set an ambitious target to generate power from hydro sources by establishing pumped storage to the extent of 15,000 MW at a staggering cost of ₹75,500 crore, he adds. Work on the Kundah pumped-storage hydro electricity project is in progress at a cost of ₹3,522 crore. It is expected to be completed in 2025-26.
A 765-kilo volt (KV) sub-station is being built at Virudhunagar. The project will be dedicated to power evacuation from the existing, upcoming, and proposed renewable energy generators in the southern districts to the load centres. As part of this project, a 765-KV transmission line will be built from Virudhunagar to Coimbatore.
One of the biggest solar projects in the country, located at Kamuthi in Ramanathapuram district, has been up and running for more than seven years now. During a recent tour to the Adani Group’s project at Kamuthi, the largest solar plant in the State was showcased for journalists. The project generates nearly 30 lakh units daily. According to the company spokesperson, the 648-MW project was commissioned at a cost of ₹45.50 billion. The solar power station is established on a 2,500-acre campus, containing 25 lakh poly-crystalline solar modules, a cable network of 6,000 km, 576 inverters, and 154 transformers. The project, which was completed in eight months, was started in February 2016 and fully commissioned by September that year. Power generation commenced in phases. Today, the project, which has been plugged into a 400-KV sub-station of Tangedco, has the capacity to power 2.65 lakh homes. It has generated more than 8.40 crore units of clean energy so far.
The unbundling of the State power utility was one of the proposals in the report submitted by Arvind Subramanian, a member of the Economic Advisory Council to the Chief Minister, to the government in August 2023. The report deals with power sector reforms. Though the report is yet to be made public, Mr. Subramanian told The Hindu recently that one of the proposals was generation of green power and encouraging competition in distribution.
Net zero target
Recently, Chief Minister M.K. Stalin announced an ambitious net zero target to be achieved by 2050. For the nation, the target year is 2070. “But, given that a lot of renewable energy is going to be generated by the private sector, I think the private players would be very reluctant to invest if the health of the power utility is bad. So reforms in the power sector are important for proper renewable energy transition,” Mr. Subramanian said. While Tamil Nadu has solar and onshore wind energy, offshore wind and battery storage technologies are some distance away and so the alternative is pumped storage, Mr. Subramanian pointed out.
“In the onshore wind scene, Tamil Nadu is reaching the limits of its potential; of course, you can exploit it a little bit more. Remember, onshore wind came 20 years back and was heavily subsidised. Because of power cuts, textile mills in Tiruppur wanted to put up windmills to meet their power needs and sought subsidies. Now, the whole thing is about whether we should continue giving subsidies or phase them out as we are in a surplus situation,” he said. “Solar power in the State has good potential in the agriculture segment, but ultimately you cannot compete with Rajasthan and Gujarat. So there are going to be limitations,” Mr. Subramanian added.
Further, Tamil Nadu has a big potential in offshore wind, which is capital-intensive and would need a foreign private player, he pointed out. There is a need for a strong utility to exploit this energy. “One of the ways to incentivise them is to guarantee power purchase from them for 10 years down the road. Those things are possible only if you have a credible utility or discom that is profitable,” he said. “When you do offshore wind in Tamil Nadu, it is going to be a huge boost to manufacturing. By definition, you have to produce things close by. Opportunities are there,” Mr. Subramanian said.
“In the renewable energy push, for some considerable period of time, you need both thermal and renewable energy. So, I don’t see the trajectory of renewables leading to closure of thermal plants. What you shouldn’t be doing is investing in new thermal plants, which are not efficient even by thermal standards. Tamil Nadu has a very inefficient power sector. Generation cost is ₹2-3 per unit more than what you buy from the other States. The way to square it up is not to build new inefficient thermal capacities,” he said.
While the State government is maximising the gains from the renewable energy sector, the Central government, through the public sector undertaking NLC India Ltd (NLCIL), has incorporated two wholly owned subsidiaries: NLC India Renewables Limited (NIRL) and NLC India Green Energy Limited (NIGEL). NIGEL is focussed on new renewable energy projects, while NIRL will oversee the existing projects. NLC has 1,400 MW of operational renewable energy projects in the State. “The company is considering the establishment of a 2,000-MW ultra mega renewable energy power park through a joint venture with Tangedco and PFC Consulting Limited. Capacity addition through renewable energy sources has also increased and each year we intend to add around 50 gigawatt (GW),” says NLC Chairman and Managing Director M. Prasanna Kumar.
Lesser investment needed
Much success can be achieved through proliferation of the rooftop solar power system in the State, where the advantages of good transmission infrastructure will help to prevent distribution losses and circumvent the need for power networks. Also, lesser investment is needed, he reasons. Production-linked incentive schemes for manufacture of solar modules are also yielding results: module prices are going down, Mr. Prasanna Kumar points out. The power evacuation system is getting ready for the projects.
There has been some slowdown in thermal power generation, given the challenges in funding, fuel availability, and environmental clearance. However, the balance between thermal and renewable energy generation must be established for grid safety, he says. Action is also being taken for improving storage technology, gasification, and green hydrogen.
P. Ashok Kumar, president, Tamil Nadu Solar Energy Developers Association, says there is a huge potential for rooftop solar power generation in the domestic category. But penetration has been low in the State because of lack of awareness. In addition to the incentives given by the Centre, the State government has to offer concessions that would help in increasing the number of the rooftop solar power systems.
Mr. Ashok Kumar feels that high network charges are hampering the growth of the system. Further, solar power has not picked up in the agriculture sector under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM). This is because farmers do not feel the urge to go solar because power supply is free. There is a need to create awareness of the benefits of solar power. Kerala has done well in rooftop solar power generation and solar-powered agriculture, he adds.
T.N. trailing Gujarat
K. Venkatachalam, chief adviser to the Tamil Nadu Spinning Mills Association, says Tamil Nadu is trailing Gujarat in the wind and solar energy sectors, as the Gujarat government has a better renewable energy policy to bring in huge investments. The dampener in Tamil Nadu is the higher open access cost.
Mr. Venkatachalam points to the other issues, including the lack of quality evacuation infrastructure and curtailment of wind and solar energy. Renewable energy developers do not get payments promptly, he says, and there are challenges in re-powering old wind turbines.
Re-powering should be viable for the investors. With the present cost of investment, it will require around ₹6,000 crore immediately (for 750 MW) to rebuild the capacity of wind energy generators in the State. Further, around ₹4,000 crore a year (for 500 MW every year) will be required for replacing the old wind energy generators every year in phases, he says. As most windmill owners are micro, small, and medium entrepreneurs, the investment would not be possible immediately, Mr. Venkatachalam says, pressing for incentives such as loans at special interest rates, annual banking of wind energy, and a special feed-in tariff.
Recently, the Tamil Nadu Electricity Regulatory Commission issued a draft procedure for managing the curtailment of wind and solar generation. It suggested compensation to the generators if the generation was curtailed for reasons other than grid stability.
Sundararajan, of Poovulagin Nanbagaral, an NGO, citing the report ‘White Elephants’ released by Climate Risk Horizons, says Tangedco has been facing huge losses and new coal power projects should be shelved. He says that in a State like Tamil Nadu blessed with abundant renewable energy, curtailment has been an ongoing issue, which is attributed to grid-balancing requirements, transmission congestion, and limited flexibility of conventional capacity. There is a reluctance to cut thermal generation to accommodate renewable energy as the fixed charges are payable even if a plant is not operated. As a result, renewable energy is often backed down when demand is low and conventional capacity cannot be curtailed further. Based on the current and projected cost, a combination of renewable energy and battery storage is the “least cost option” for the State to meet the increase in energy demand. Pursuing such a strategy will help the State save ₹15,000 crore-20,000 crore from 2024 to 2030 in power purchase cost alone, he adds.
