The Tamil Nadu Electricity Regulatory Commission will soon pass orders to the state's power distribution companies to buy a specified minimum percent of their power from renewable energy sources.

The state agency has played a significant role in promoting large-scale renewable energy installation in Tamil Nadu. It has unveiled many financial incentives (such as Special Capital Subsidy) for the promotion of solar energy and other renewable energy sources.

TNERC fixed a provisional tariff rate of Rs. 3.15 per kWh which is significantly higher than what the state electricity board charges the domestic users. And under the Micro, Small and Medium Enterprises Policy 2008, companies can avail a subsidy of up to Rs. 3 million ($ 66,740) for the procurement of solar energy equipment.

Under this new program a nodal agency would be designated for accreditation and recommendation of renewable energy projects that would sell the electricity. The distribution company, Tamil Nadu Electricity Board, would be required to buy at least 14 percent of the power generated  from solar energy. If the electricity board proves that there is inadequate supply of solar power it would have to fulfill its obligation buy purchasing electricity from other renewable energy-based power plants such as wind farms.

Being the closest to the Equator on the Indian mainland, Tamil Nadu receives very high amount of solar radiation per unit area (solar insolation). With an average annual solar radiation of 7 kWh/m² its solar energy resources are among the highest in the country. The solar power industry is slightly less developed in terms of economics and technology when compared to wind energy.

For years it was believed that Tamil Nadu had a maximum wind energy potential of 1362 MW (measured at a height of 50 m) but as of 31 October 2009, Tamil Nadu had an installed capacity of 4300 MW, largest in the country. Such a large capacity has been realized due technical advancements in wind turbine systems brought in by companies such as Suzlon and Vestas. Offshore wind resources remain undetermined and untapped.

Wind energy is highly popular in the state partially due to its competitive tariff rates but now that the Indian government has launched the National Solar Mission such financial incentives and government-backed initiatives are essential for the promotion of solar energy in India.

This obligation could be in addition to the already existing guidelines that obligate state electricity boards to increase purchase of electricity from renewable energy-based power plants by one percent every year. Since the Indian Constitution allows state as well as central government to bring legislations regarding electricity, therefore it we could very well see a slightly accelerated growth of renewable energy-based power plants at least in Tamil Nadu.

Hat tip: The Hindu
Image credit: Taylor Dundee on Flickr (Creative Commons)

The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.