Inconsistent price factor, delayed payments and lack of carbon credits are a few of the major deterrent factors preventing private sugar mills from going in for expansion of cogeneration plants to augment the production of power as demanded by the State government.

Owners of leading sugar mills in Tamil Nadu, who took part in a State-level review meeting convened by the State government to find ways and means for enhancing cogeneration power in about 35 sugar mills, including private, public sector and cooperative units, pointed out that the variable price factor — one for the crushing season and another for the off season — was the primary reason for the mills' lack of interest in going for augmented generation of power.

Ministers Arcot N. Veerasamy and Veerapandi S. Arumugam interacted with the participants at the meeting here on Friday,

The mill owners demanded that the Tamil Nadu Electricity Board (TNEB) immediately fix a constant price, between Rs. 6 and Rs. 7 per unit, for purchased produce from the mills to make it cost-effective.

The Power Trading Corporation to which the mills had been told to sell power had put many in a disadvantageous position. Ram V. Thiagarajan (Thiru Arooran Sugar Mills), S. V. Balasubramanian (Bannari Group), N. Manickam (Sakthi Sugars), Palani G. Periyasami (Dharani Sugars), K. Raghunathan (EID Parry) and others vouchsafed the same.

Presiding over the session, Agriculture Minister Arumugam said that the installed capacity in sugar mills was 606 MW, with private ones garnering a lion's share of 586 MW. “Once the modernisation and erection of cogeneration plants in cooperative mills being undertaken at a cost of Rs.1,125.67 crore are completed, we may get additional power of 183 MW. A total of 800 MW of power could be generated from sugar mills.”

Electricity Minister Arcot N. Veerasamy, while winding up the session, said that the demands for a uniform price and transferring the carbon credits to the green power producers were genuine. “We will take up these issues with the Chief Minister. We will convene another round of talks at Chennai to sort out other issues.”

By 2012, Tamil Nadu would end up with surplus power and minimise its dependency on outsourcing, he said, and asked the officials in cooperative mills to expedite the ongoing work on cogeneration plants.TNEB Project Director K. Sukumar Solomon, Chief Engineer N. Balakrishnan, SE R. Udayasurian, Chief Engineer (Sugarcane), G. Subramanian and others spoke.

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