Marginal capacity addition casts a shadow over wind energy

Is the end of Tamil Nadu’s wind power “growth story” in sight? In a State that witnessed an unprecedented growth in the sector of wind energy not long ago, capacity addition during the just-concluded financial year of 2013-2014 was marginal, with 107 megawatt (MW).

The capacity of wind mills, which was around 2040 MW in April 2005, rose to 6,971 MW seven years later. This meant an average increase of 616 MW a year. In monetary terms, going by the Tamil Nadu Electricity Regulatory Commission’s approved figure of capital cost of Rs. 5.75 per MW, the State saw a capital investment of Rs. 3,540 crore every year.

During 2011-2012 alone, the increase in the installed capacity of wind mills was 1,083 MW. But, since then, the sector saw only an incremental increase. In the last two years, wind mills of a mere 282 MW were commissioned.

Interestingly, despite the Central government’s policy intervention last year, there has been little improvement. A generation-based incentive (GBI) scheme was reintroduced, but the capacity addition was modest.

A senior policymaker says the sector has been thriving on the basis of one sop — accelerated depreciation. Once this was withdrawn in April 2012, the sector has just crumbled, he says. Though industry does not accept this point, it has been demanding restoration of this concession.

Energy specialists A.D. Thirumoorthy and Vineet Vijayaraghavan acknowledge that the potential of the existing sites has almost been exhausted. In terms of land availability and supporting infrastructure in the present regions such as those in Kanyakumari, Tirunelveli, Theni and Coimbatore, the level of saturation is quite visible.

But, the president of the Indian Wind Power Association, K. Kasturirangaiyan, has a different take. It is not just in Tamil Nadu but also in other States that the rate of growth has gone down. The capacity addition nationwide was 3,200 MW a few years ago. Now, it should be around 1,500 MW.

However, the specialists say there is enormous potential for growth of the sector in the State. While Mr Thirumoorthy feels that with greater technological advances, the sector is bound to grow further, Mr Vijayaraghavan points out that new sites are being developed, and it will take a few years for transmission infrastructure to be put in place. Mr. Kasturirangaiyan reckons that the restoration of the benefit of accelerated depreciation will give the sector a fresh lease of life.