Source: Business Standard, Jul 19, 2016
New Delhi: Leading wind power producers are facing problems over payments and demand that affect close to 11,000 Mw, or 40 per cent of the wind power generating capacity in the country.
Tamil Nadu, Rajasthan and Maharashtra are yet to clear payments to wind power producers.
These states, along with Madhya Pradesh (MP), have also asked power producers to curtail generation by 50 per cent or more. Wind power producers operating in these states include Suzlon, Enercon, Gamesa, ReNew Power, Hero Future Energies, Orange Wind Energy, NuPower Renewable, NSL Renewable and Inox Energy. Rajasthan has asked producers to curtail generation by close to 40 per cent and Tamil Nadu by 20-30 per cent. The period of peak wind power generation matches peak demand during summer. “Lack of inter-state transmission capacity is hurting our generation plans. The consumer cannot make most of the surplus wind power available during summer,” said an industry executive.
The host states were also delaying payments, said one of the representative associations for the industry. Industry executives said the combined backlog was close to Rs 5,000 crore. Rajasthan owes Rs 1,500 crore and has not disbursed payments since last August.
Maharashtra’s payments are pending for six months and Tamil Nadu has not made any significant payment since January. The Supreme Court last July directed the Tamil Nadu Generation and Distribution Corporation to disburse 12 per cent of the delayed payments. The petition was filed by the Indian Wind Power Producers’ Association. No payment had been received yet, the association said.
“The decline in interest from states is partly due to the falling tariffs of solar power. No state wants to pay more than Rs 5 per unit for wind power as competitive bids in solar projects spiral down. MP recently decreased its feed-in tariff for wind power to below Rs 4.5 per unit,” said Amit Kumar, partner (energy and utilities), PwC India.
From next year, the industry will stop receiving the 50 paise per unit generation-based incentive as well. “This will affect the financial health of these companies. A chunk of projects will face problems in financial closure,”Kumar added.
Madhya Pradesh, Maharashtra, Gujarat and Rajasthan are not signing new power purchase agreements, leaving investors in a limbo. “We might see some agreements from Telangana, Karnataka and Andhra Pradesh, but the existing capacity faces threats,” said an industry executive.
The Maharashtra government was also mulling a surcharge on captive wind power generation, said companies operating in the state. Officials said the matter was under consideration and no decision had been taken.