“Two renewable energy transmission infrastructure projects eligible for grant of Rs. 1,500 crore”

With an inter-Ministerial group turning down Tamil Nadu’s request for assistance from National Clean Energy Fund (NCEF) for two renewable energy transmission infrastructure projects, Chief Minister Jayalalithaa has called upon Prime Minister Manmohan Singh to intervene.

The two green energy corridor project components, she said in a letter to Dr. Singh, were not approved by the Group chaired by Union Finance Secretary even after Union Ministry of New and Renewable Energy (MNRE) and Central Electricity Authority cleared them. The Union Planning Commission had also recommended the projects for the assistance.

The projects were eligible for a grant of Rs.1,500 crore from the NCEF, Ms. Jayalalithaa said, adding the IMG’s stand that transmission schemes for renewable energy could not be supported from the fund was against the guidelines of Centre.

In the letter, released to the media on Monday, the Chief Minister said Tamil Nadu, a pioneer in harnessing renewable energy with an installed capacity of 7,145 MW in wind power alone, planned to increase this capacity by a further 5,000 MW in five years. “I have also announced a solar policy with the aim of installing 3,000 MW of solar power in the next three years,” she said.

Lack of adequate power evacuation infrastructure, however, came in the way of reaping full benefit of the installed capacity for wind energy generation. Transmission infrastructure to evacuate renewable power was very expensive. “The investment required for creating evacuation capacity for wind and solar power is as high as five times of what is required for conventional thermal power,” Ms. Jayalalithaa pointed out.

The inadequate evacuation capacity, she said, had resulted in situation when wind turbines were asked to back down due to lack of transmission capacity – although wind was a clean source of energy and the generation also very cheap.

To address the issue, the State government proposed to take up wind power evacuation projects at a cost of Rs.5,998 crore in two phases through the Tamil Nadu Transmission Corporation.

Under the NCEF, set up by the Centre and whose scheme guidelines were issued by the Ministry of Finance, projects relating to creation of power evacuation infrastructure for renewables are eligible for assistance. It was on this basis that Tamil Nadu Transmission Corporation submitted these projects, conceived in close co-ordination with the MNRE, for NCEF assistance.

The MNRE, Ms. Jayalalithaa added, after consulting the Power Grid Corporation of India Ltd and Central Electricity Authority validated two of the three proposals at a total cost of Rs.3,758 crore and recommended approval of a Rs.1500 crore grant for these projects from the NCEF. This was in tune with the guidelines which limit assistance from the Fund to 40 per cent of the project cost. The third proposal for setting up 400 KV substations with associated transmission lines at Karaikudi and other places in the State was being executed with Tamil Nadu’s own resources.

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