A new industry can arrive at the doorstep of Tamil Nadu. If the government’s plans fructify, the Gulf of Mannar, can house a fleet of offshore wind turbines.
On 11 July, the Ministry of New and Renewable Energy came up with a Strategy Paper for offshore wind projects. Two regions have been suggested –the Gulf of Khambhat, Gujarat and the Gulf of Mannar, Tamil Nadu.
TN can lead again…
Three decades ago Tamil Nadu took the lead in harnessing wind power. It emerged the leader. During May to September, Vaayu Bhagwan (wind god) provides plenty of electricity, often meeting even 30 per cent of the daily power consumption of the state. There is now the opportunity for TN to generate power offshore.
The paper envisages two models for the Gulf of Mannar. First is with viability gap funding (VGF) by the government of India and second, merchant power plants with open access sales of electricity. The MNRE is said to have asked the Ministry of Finance for a VGF of Rs 15,000 crore for offshore wind. Under this model, developers seek VGF from the Central government; those who want the least funding will get to sign the long-term power purchase agreement (PPA). It is difficult to see this coming through, given the country’s grim fiscal deficit situation, but the second mode—of merchant plants with open access—could well happen.
Under the merchant power model, developers will set up their plants and sell the generated electricity through open access directly to consumers; they will not sign any long term PPAs with discoms. The government will provide infrastructure to evacuate the power. The deal for the developers (energy companies) will be sweetened in the form of support like waivers of some charges, renewable energy certificates and carbon credits, which they can sell.
A 2000 MW of offshore wind capacity could come up in the Gulf of Mannar. This is good news; but there are certain issues that could sink the offshore project. For example, the cost of power will be not less than Rs 8 per kWh. Unless the government waives charges and allows liberal banking of the power generated (that is, allowing a developer to ‘bank’ his electricity with the grid and to draw it later), the projects is not likely to be financially viable.
Environment concerns
The Gulf of Mannar being an economically fragile region, the second concern is the pushback from environmentalists. The gulf harbors over 3600 flora and fauna; from sea turtles to dolphins. For this reason alone, the project might face severe backlash from the environmentalists as also from habitual protestors and vested interests funded from abroad. (Remember the fiery protests that stalled construction of the Kudankulam Nuclear Power Plant for months that caused humungous losses?)
Unfortunately, the strategy paper expects developers to get the various government approvals by themselves—the government would only get them the preliminary (or in-principle, Stage-I) approval; it would have no play in getting them the more crucial Stage-II (or final) approval. An offshore project would need clearances from multifarious bodies, such as Ministries of Defence, Environment, Earth Sciences… To expect the developer to run around for securing these may not be the best way to go about it.
Experts also note that the turbines should be designed and made specifically for the region to ensure sustained quality output. ‘Readymade’ European or American turbines won’t pass muster.
The electricity generated will not all be sold to Tamil Nadu. But a large, sophisticated industry in the Gulf of Mannar will provide the locals employment and lot of custom for the Thoothukudi Port near the gulf. Tamil Nadu government should grab this opportunity and provide needed help, such as quick environment clearances.
