The Status of Solar REC projects in Tamil Nadu

Tamil Nadu is the eleventh largest state in India by area and the seventh most populous state. The state has installed electricity generation capacity of 19,432 MW (as on April 2013) that constitutes 9% of the total installed electricity generation capacity of India mainly from fossil fuels such as coal and natural gas. In addition to the major share of fossil based electricity generation capacity; Tamil Nadu has highest installed renewable energy capacity (7,979 MW by Sep 12, Tamil Nadu Energy Development Agency -TEDA) in India. Renewable energy contributes around 41% of the total installed capacity of the state. Among renewable energy, wind energy is predominant in the state having a total installed capacity of 7,134 MW (as of Sep 2012, TEDA) which is about 37% of the entire wind energy capacity of India.

Solar sector is picking up pace in the state with increasing interest among private players. Tamil Nadu state solar policy and the newly introduced Solar Purchase Obligations (SPO), have triggered development in the solar sector.  Under SPO, obligated entities have targets to buy certain percentage of their total energy requirement from solar energy source.

Every obligated entity should have met its target as a result of their own generation from solar technology based power plants or through procurement of power from other solar energy generators or by way of purchasing Solar -Renewable Energy Certificate (REC0 or by the combination of all.

Renewable Energy Certificates (RECs) are meant to increase revenue of the renewable energy projects developers through market based mechanism. Tamil Nadu Transmission Corporation Ltd (TANTRANSCO) is the nodal agency for accrediting REC projects.  As of Sep 2013, Tamil Nadu has total 5 MW of grid connected solar energy projects registered under REC mechanism (REC registry website). Following table shows various project developers in Tamil Nadu and installed capacity of their solar PV technology based power plants registered under REC mechanism;

Tamil Nadu solar policy entered into force in 2012 and will be operational till 2015. This policy aims to achieve 3000 MW of installed capacity by 2015 (1500 MW from utility scale, 350 MW for rooftops and remaining 1150 MW to be achieved through projects under REC mechanism).  It also mandates 3% SPO requirement till December 2013 & 6% SPO requirement from 2014. Solar park development is another attractive feature under this policy. Developers would be selected through competitive bidding for the development of solar power projects in the state. TEDA is the nodal agency and would be responsible for granting single window clearance and various other statutory clearances required for the development of the project (Read more here).

At this stage, the registered solar capacity is very low as compared to the wind capacity (Total registered capacity under REC mechanism for wind energy in Tamil Nadu is 844 MW as on Sep 2013.). However, it is expected to increase considering increasing awareness for solar sector, decreasing cost of solar panels, favorable government’s policy and the ever increasing energy shortfall in the state.

Source: REC registry website, TEDA, CEA