Tamil Nadu has petitioned the Supreme Court against last year’s order of the Appellate Tribunal for Electricity, which held that the State government could not order specified consumers to buy (expensive) solar power.

In October 2012, the Tamil Nadu government announced its ‘solar policy’, the cornerstone of which was mandating certain consumers to buy solar power. The State electricity regulatory commission, TNERC, formalised the order in March 2013, making it mandatory for the consumers to buy 6 per cent of their electricity consumption from solar power plants (3 per cent in the first year).

The ‘Solar Purchase Obligation’ (SPO) would create a demand, to meet which solar companies would set up plants in the State. The policy was hailed as one worthy of emulation by other States.

The Tamil Nadu Spinning Mills Association (TASMA) went to the Appellate Tribunal for Electricity (APTEL) against the SPO.

The Association’s members, who collectively own 3,000 MW of wind power capacity in the State, were already producers and consumers of green power. TASMA calculated that due to the SPO, its members would have to spend one rupee more for every unit of electricity consumed.

Solar policy

In January this year, APTEL set aside the Tamil Nadu Solar Policy. The Tribunal said the State government could not impose the 6 per cent purchase obligation as there was already another similar obligation in effect — the ‘Renewable Purchase Obligation’, under which specified entities in Tamil Nadu were required to purchase 8.75 per cent of their power needs from renewable sources, and an additional 0.25 per cent specifically from ‘solar’.

The State solar policy also exempted the State-owned electricity generation and distribution entity, Tangedco, from the ‘SPO’, which APTEL said was discriminatory.

Complications

Tangedco had, in the meantime, tendered for purchase of solar power and was ready to sign power purchase agreements with about 700 MW of to-be-built solar power plants, when the APTEL order stopped the solar fiat in its tracks.

The Tamil Nadu government and Tangedco are extremely annoyed with TASMA, industry sources say in private. In this context, the government’s refraining from moving the Supreme Court against the Tribunal order surprised many. But the move came last month. On July 30, the apex court condoned the delay in Tangedco’s filing of the petition, admitted the case and posted it for hearing on October 17.

Meanwhile, the regulatory commission, TNERC, has floated a consultative paper for raising the solar component of the ‘renewable purchase obligation’ from 0.25 per cent to 2 per cent — which could support the creation of 1,000 MW of solar capacity in the State. TASMA is against this proposal.

India has close to 3,000 MW of solar power capacity. Sunny Tamil Nadu, a leader in wind power with 7,200 MW of capacity of the country’s 22,000 MW, is a solar laggard, though.

The State, with 100 MW of solar power capacity, ranks sixth, after Gujarat (916 MW), Rajasthan (730 MW), Madhya Pradesh (347 MW), Maharashtra (240 MW) and Andhra Pradesh (131 MW). Other States are catching up — Karnataka has bid out for 500 MW; Uttar Pradesh intends to, for 300 MW.

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