Maharashtra loses focus on wind power generation

Nagpur : Maharashtra is fast losing the tag of the leading producer of wind energy in the country, with Gujarat taking the lead and Karnataka is fast catching up with the State. It is worrying that at a time when the world is embracing green power, Maharashtra is lagging behind the other States in the country.

The data from The Ministry of New and Renewable Energy (MNRE) and Indian Wind Turbine Manufacturer’s Association (IWTMA) shows that the growth of renewable energy in Maharashtra has been the lowest in the last three fiscals as compared to States like Andhra Pradesh, Gujarat, Karnataka and Tamil Nadu.

While these States have witnessed an annual growth in green power of minimum 4.5% to maximum 43.5%, in Maharashtra it has been miniscule 0.4% to maximum 2.1%.

It is pertinent to note that the Prime Minister Narendra Modi had set an ambitious target of achieving 175 GW of renewable energy by 2022, but the BJP-ruled Maharashtra’s contribution to the renewable energy segment is consistently declining for the last three years.

Maharashtra’s contribution to renewable energy is going down, thanks to the 10-month-long stand-off between the wind power producers in Maharashtra and the State Electricity Development Corporation (MSEDCL) over tariff among other issues.

MSEDCL has capped the tariff at Rs 2.52 per unit. But wind power producers, are demanding a tariff at Average Power Purchase Cost (APPC) rate. The tariff cap of Rs. 2.52 per unit is unviable. Producers say new turbines with advanced technology have high power generating capacity and can afford lower tariffs. If old wind mills are to be repowered with advanced turbines and blades, they need a policy in place. The 500 MW wind turbines in the State were installed 13 years ago at an investment of Rs. 3,000 crore. If one has to install 500 MW of wind turbines today, it will need an investment of Rs. 4,500 crore

Wind producers, however, say Rajasthan has continued to offer attractive rates, while renewing the power purchase agreements. Wind power producers have also opposed amendments in the MERC Act, stating they have brought in stringent open access conditions, besides heavy surcharges. They say relaxing these conditions for older projects is the only way to facilitate easy and sustained generation to make the businesses viable in the longer run.

Since the production has been less, the inflow of investment has also reduced in Maharashtra. The industry has been facing lot of issues since it shifted from feed-in-tariff to reverse bidding system. MSEDCL’s ceiling set for reverse bidding resulted in lot of investors skipping the bids, as the cost was not viable to them. The State Commission did not consider depreciation, project cost, debt portion, Capacity Utilisation Factor (CUF), receivable cycle etc. while calculating the tariffs, and hence it will be a loss making affair for any of the generators. There has also been no clarity on the Open Access segment. All these factors make it nearly impossible for the producers to do business and make profit.

The State government’s intention might be to reduce the purchase price of wind power, however, the consumer rate for power purchase is highest in the country. Power tariff of Maharashtra is 23% higher than Gujarat in manufacturing sector and 60% higher in the commercial infrastructure sector. Capacity addition has fallen sharply as OEMs (Original Equipment Manufacturers) are going slow on installing new projects.

The improvement of the sector depends largely on MSDECL’s policy initiatives and support towards the wind sector. Wind energy is slated to be one of the key drivers of the energy sector and will aid renewable energy to go a long way in addressing the climate change issue. We need to harness the 45 GW wind energy potential in the State to ensure sustainable, affordable and reliable energy for all.

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