"Tamil Nadu to Impose ₹50 Lakh/MW 'Resource Charge' on CTU Wind Projects"

Tamil Nadu has announced a new ₹50 lakh per megawatt (MW) 'resource charge' for wind projects connected to central transmission infrastructure, such as those developed by the Power Grid Corporation of India. This decision is part of the state's effort to address its renewable purchase obligation (RPO) and manage the use of wind resources.

The state's move comes in response to the observation that many wind projects in Tamil Nadu are linked to the central grid, and thus do not contribute directly to the state's RPO. Industry experts argue that this new charge may further complicate the viability of wind projects in Tamil Nadu, where land prices are already high. A government note highlights the difficulty of securing land due to rapid urbanization, making the establishment of wind power projects increasingly challenging.

The note, issued by the Tamil Nadu Green Energy Corporation Ltd (TNGECL), points out that the Union Ministry of Power has set a wind RPO of 0.67% for 2024-25, which is expected to rise to 3.48% by 2029-30. The RPO mandates the share of wind energy that state-owned utility TANGEDCO must supply, with penalties for non-compliance.

To address this, TNGECL's note stresses the need to promote wind power projects connected to the State Transmission Utility (STU) to better meet local energy needs and RPO requirements. Since 2018, approximately 1,700 MW of wind power projects connected to central transmission utilities have been commissioned in Tamil Nadu. The power generated from these projects is often used in other states to fulfill their own RPOs.

The new ₹50 lakh per MW resource charge will apply to all future wind projects and pending applications. The aim is to encourage developers to connect their projects to the state grid and contribute to Tamil Nadu's energy supply. Tamil Nadu has set an ambitious goal of reaching 5,000 MW of wind power by 2030.

Despite being India's windiest state and a pioneer in the wind industry, Tamil Nadu is losing ground to other states like Gujarat, which leads in wind capacity, and Karnataka, which is rapidly expanding its wind energy sector. Between 2019-20 and 2023-24, Tamil Nadu added 1,299 MW of wind power, while Gujarat contributed 4,182 MW, and Karnataka added 1,228 MW. Tamil Nadu currently ranks second in wind capacity with 10,603 MW, behind Gujarat’s 11,723 MW.

HBL