Despite Tamil Nadu slipping temporarily to the third position in terms of India’s commissioned solar infrastructure, and its wind farms reaching their end of life, the state could account for 67 per cent of the total installed capacity and 56 per cent of generation from zero-emission technologies, says a report by the Institute for Energy Economics and Financial Analysis (IEEFA). In its latest study on nine of the top-15 countries and power markets globally in terms of wind and solar power, Tamil Nadu was ranked ninth. Ahead of it on the list were Denmark, South Australia, Uruguay, Germany, Ireland, Spain, Texas and California. In another report on Tamil Nadu's energy model, the institute has warned against the state’s efforts to build 22,500 Mw of coal-fired power plants despite its favourable investment advantages and lower wind and solar tariff costs. With a 14.3 per cent share of India’s total wind and solar power generation in 2016-17, Tamil Nadu is the top state in terms of variable renewables market share and installed renewable energy capacity. Of the 97 tetrawatt hours produced in the year, the state accounted for 13.9 tetrawatt hours. In terms of installed capacity, of the 30 Gw across Tamil Nadu as of March 2017, variable wind and solar power accounted for 9.6 Gw, or 32 per cent. Firm hydroelectricity added another 2.2 Gw or 7 per cent, nuclear 8 per cent and biomass and run of river three per cent. As such, zero-emission capacity is 50 per cent of Tamil Nadu’s total, according to the institute’s report, ‘Power - Industry Transition, Hear and Now’, released on Wednesday. "With much of Tamil Nadu’s renewable energy coming from end-of-life wind farms installed 15-25 years ago, the average utilisation rates are a low 18 per cent, making the contribution of variable renewables to the total generation even more impressive," it added. The state was set to announce a 1-Gw offshore wind tender in 2018 for commissioning in 2024-25 which would provide further system diversification in the medium term, it added. The state also has India's largest pumped hydro storage project of 500 Mw underway at Kundah and, with renewable energy deployments across the state likely to grow by 10-20 per cent annually over the coming decade, this facility would provide the much-needed extra capacity to manage peak demand requirements, it added. A proposed interstate green power corridor would help the state, with more than 2,000 Mw currently under construction, to supply zero-emission power to other states. In another report, 'Electricity Sector Transformation in India - A Case Study of Tamil Nadu', published earlier this month, the institute forecast that 67 per cent of the installed capacity and 56 per cent of the generation in Tamil Nadu would be derived from zero-emission technologies. At present, it is 42 per cent of total installed power generation capacity and 18 per cent of generation, making it one of the top states globally, behind only a few provinces in China and Texas in the US. “IEEFA bases its forecast on a clear tipping point achieved in 2017: New renewable investments are being underwritten at tariffs of Rs 2.43-3.00/kilowatt-hour (kWh), below the average tariff paid to NTPC, India’s largely central government-owned power generator, for thermal power in 2016-17 of Rs3.20/kWh,” said Tim Buckley, IEEFA’s director of energy finance studies, Australasia, and lead author of the report. While it has temporarily slipped to the third position in terms of commissioned solar infrastructure in the country, the very successful 1.5-Gw solar tender of July 2017 will see the state vying for leadership again by the end of 2018-19, it added.
Estimates are that the total installed capacity in Tamil Nadu is forecast to expand to 55 Gw by 2026-27. The wind tender outcome has come down to a record low of Rs 2.43 per kWh, down eight per cent on the previous record low and 50 per cent on pre-2016 wind tariff norms, along with the lower solar tariff prevailing in the past two years, could act as an accelerant to the sector in the state.The study has cautioned against the state’s efforts to build 22,500 Mw of coal-fired power plants in spite of its favourable investment and lower tariff for wind and solar. Assuming the state completes all plants with a capacity of 4.5 Gw under construction, and half of the new 5-Gw coal-fired power plants permitted, the high priced coal-fired power plant capacity utilisation will collapse to an unsustainable 45 per cent average by 2026-27, it said. The total coal capacity will reach 16.6 Gw even after allowing the closure of all the 3.75 Gw of beyond end-of-life coal power plants. The state will have a 5.6 per cent compound annual growth rate in electricity demand over this period. "The addition of 10.3 Gw of new utility-scale solar by 2026-27 looks entirely commercially feasible after the 1.5 Gw solar auction of July 2017 at just Rs 3.47 per kWh. Combined with 1.5 Gw of rooftop capacity, solar is forecast to provide one-third of all new generation needs this decade. Onshore and offshore wind capacity additions will provide an estimated 41 per cent of the production uplift needed. Bringing online the 1 Gw Unit 3 of Kudankulam nuclear would provide 19 per cent of new supply needs, with biomass and run-of-river hydro the balance. Total installed capacity expands to a forecast 55 Gw by 2026-27 and coal-fired generation is reduced from 69 per cent to just 42 per cent market share in Tamil Nadu," it said.