Amongst 29 states and 7 Union Territories in India, Tamil Nadu currently has the largest installed capacity of renewable Energy at 10.686 GW (as of 31st Dec, 2017) which is almost 16 % of the current renewable capacity of the country (Refer Fig 1.1).
In the month of February this year, The Insititue of Energy Econimics & Financial Analaysis (IEEFA) published a report titled ‘Power-Industry Transition, Here and Now Wind and Solar Won’t Break the Grid: Nine Case Studies’. This report has been authored by Gerard Wynn, an energy consultant in UK. One of the Breakthrough Electricity Markets that has been showcased in this well-researched and comprehensive report is Tamil Nadu. According to the report –
Tamil Nadu ranks 9th on the list of global electricity markets that are leading the transition into wind and solar.
Below we have reproduced a Executive Summary from another IEEFA Case Study on Tamil Nadu published in the Report ‘Electricity Sector Transformation in India – A Case Study of Tamil Nadu’ authored by Mr. Tim Buckley and Kashish Shah.
- Electricity production climbs to 164 terawatt-hours (TWh) by 2026/27, an increase of 60TWh or 57%.
- IEEFA forecasts 67% of installed capacity and 56% of generation in Tamil Nadu will be derived from zero-emissions technologies by 2026/27. Distributed battery storage, demand response management, further diversification of generation capacity across fuel types, solar thermal power, pumped hydro storage (e.g. 500 megawatts (MW) at Kundah) and interstate grid connectivity will each play a key enabling role to accommodate a progressively higher market share of variable renewable energy sources.
- Onshore and offshore wind capacity additions will provide an estimated 41% of the production uplift needed – As of March 2017, Tamil Nadu has 7.85 GW of wind operational. This makes Tamil Nadu one of the largest states in the world in terms of operational wind farms. August 2017 saw the finalization of a 500 MW wind tender by TANGEDCO at a near TN state record low tariff of Rs3.42/kWh. IEEFA models a near doubling to 15.0 GW of operational wind by 2026/27 across Tamil Nadu, including from repowering end-of-life projects to attain a tenfold uplift in capacity at existing facilities. Indian Electricity Sector Transformation – Tamil Nadu 3 IEEFA expects offshore wind to emerge as a new, cost competitive source of electricity generation system diversification for Tamil Nadu by 2025.
- IEEFA forecasts that Tamil Nadu will see total solar installs increase sixfold by 2027 – If Tamil Nadu can maintain its sector leadership in rooftop Solar, this would imply 1-2 GW of rooftop solar is a conservative target by 2026/27, requiring 100-200 MW annually over the coming decade. 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 Rs3.47/kWh. Please note that Maharashtra had overtaken Tamil Nadu in Rooftop Solar by the time this report was published.
- TANGEDCO’s improving financial profile is forecast to move into a net profit for the first time in two decades within 2-3 years. Critical to any sustained momentum in the Indian electricity sector transformation is a solution to the financial distress of the states’ distribution companies. Ongoing losses at Tamil Nadu Generation and Distribution Corp. (TANGEDCO), have been a major constraint on electricity sector progress. TANGEDCO’s 2016/17 loss has been reduced by three quarters in just three years to Rs3,783 crores (US$582m). June 2017 saw the announcement that TANGEDCO was targeting a breakeven profit result for 2017/18. IEEFA views this as overly optimistic, but the path is set for better than breakeven results within the next few years.