The Climate Risk Horizons (CRH) report “White elephants — new coal investments threaten Tamil Nadu’s financial recovery” has highlighted that going ahead with the Udangudi power project could cause “financial stress” for the State government.
The report brings out the State government’s over-dependence on thermal power plants even while being a leader in wind energy generation. The Tamil Nadu Generation and Distribution Corporation (Tangedco) is going ahead with the construction of the Udangudi thermal power plants of 1,320 MW and 1,600 MW at a cost of ₹26,627 crore.
G. Sundararajan of Poovulagin Nanbargal pointed out that at a time when the power utility had a debt of ₹1,34,000 crore, it was not wise to spend on thermal plant whose utilisation could be minimal and the cost of power generated would be as high as ₹8.20 a unit.
The power utility was executing four thermal power projects which were under various stages of construction having a capacity of 5,565 MW. The study says despite Tangedco having a renewable energy share of nearly 25%, the power utility had been promoting more thermal energy rather than exploring the option of solar combined with battery storage to meet the peak hour demand.
The Udangudi project would not only add to the financial burden of the power utility but also leave a hole in the generation cost which could be as high as ₹8.20 a unit operating at a plant load factor of 55%, the study projects. The study says the power utility should opt for a mix of thermal power with renewable energy and help in fighting climate change.
High cost
However, a senior official of Tangedco said although the report had projected the solar power combined with storage cost to be ₹5 a unit, the cost was high for both solar as well as storage. The cost per unit could be ₹30 but could come down in future, he said. The electricity official said the State had proposed to freeze construction of any new thermal power plants and this had been announced in the Assembly.
