Wind energy firms’ plea to suspend PPA clauses rejected

TNERC says the riders ensure level-playing field

Tamil Nadu Electricity Regulatory Commission (TNERC) has rejected a plea by two private wind power generators to cancel certain clauses in the power purchase agreement (PPA) signed with Tamil Nadu Generation and Distribution Corporation (Tangedco).

Last year, Tangedco had agreed to procure 200 MW of wind energy from ReGen Powertech Pvt Ltd and 250 MW from Corolla Green Power Private Limited (100% subsidiary of Leap Green Energy Private Limited) for ₹3.42 per unit after they emerged as successful bidders through a tender process.

In separate petitions, both companies sought for suspension of two clauses in the power purchase agreement.

One of the clauses said that capacity utilisation factor (CUF) for the wind power project shall be in the range 20% to 27.15% and for any excess generation beyond that the Tangedco will buy the excess generation at 75% of the agreed tariff as per the agreement. The developers have to pay Tangedco in case of shortfall in output, according to the clauses.

CUF is the measure of how well a plant can be utilised. It is presented as a percentage of the installed capacity of a plant. CUF is the real output compared to theoretical maximum output.

Obligated to buy

Another clause was that the private wind producers are free to re-power their projects during the duration of the agreement. However, the State utility will be obligated to buy power only within the specified capacity utilisation factor as per the agreement and it will buy any excess generation at 75% of the agreed tariff. The companies said the clauses restrict them from pursuing advanced technologies for wind energy generation.

However, the TNERC rejected the pleas and said the clauses not only ensure efficiency but also discourage generation below the capacity, which protects the consumer interest. It said the clauses provide a level playing field and encourage the developers to generate not only up to their potential but also reward them for excess generation with payment of 75% of the tariff.