Tamil Nadu could add 25 GW of new wind power capacity by 2030, according to a new roadmap released by the Global Wind Energy Council (GWEC).

Tamil Nadu has an installed wind power capacity of 9.6 GW, which constitutes a quarter of India’s total wind installations.

The state also hosts 51% of India’s total installed captive wind capacity.

The GWEC roadmap said that Tamil Nadu could become a key investment destination in Asia and provide a significant boost to its economy through renewable energy development if the state enacted and implemented supportive policies.

Tamil Nadu has about 10% of India’s potential for wind power at a hub height of 120 meters. Of this, approximately 12.5 GW can be developed with a capacity utilization factor of more than 35%.

India installed 878 MW of wind capacity in the third quarter (Q3) of 2022, a 129% year-over-year increase compared to 384 MW installed in the same period last year.

Installations grew over 104% quarter-over-quarter compared to Q2 2022. The significant rise in installations during the quarter was primarily due to the commissioning of projects that were pending.

The slowdown in wind capacity growth in recent years has made it urgent for the state to implement policies and regulations that support the expansion of wind installations and help realize the potential of wind power.

Source: GWEC

To estimate the capacity additions, different scenarios were developed:

Low case scenario assumes that there will be no additional programs or policy interventions to increase wind capacity in Tamil Nadu.

It is estimated that by 2030, an additional 4 GW of capacity will be added, bringing the total to 14 GW. This scenario assumes that capacity additions will continue at the current rate.

Base case scenario assumes that capacity will be added in Tamil Nadu based on state and national trends and that some policy interventions will ease constraints on capacity additions.

It will result in an additional 13 GW of capacity in Tamil Nadu by 2030, bringing the total to about 23 GW.

Tamil Nadu will require a total of ₹746 billion (~$9.03 billion) to add 13 GW capacity. Assuming a debt-equity ratio of 75:25, around ₹186 billion (~$2.25 billion) equity infusion is required.

High case scenario assumes that Tamil Nadu fully utilizes its untapped potential and eliminates constraints, resulting in an additional 25 GW of capacity by 2030 for a total of 34 GW.

The roadmap laid out the strategy for Tamil Nadu to fully capitalize on its wind potential.

It included transitioning to renewable energy, manufacturing green technology, making manufacturing processes more environmentally friendly, producing green hydrogen, and implementing a green transition tracker.

Transitioning to renewables

The roadmap suggested that wheeling and cross-subsidy charges should be waived from the existing 50% and 40%, respectively, to promote the adoption of renewables in the state.

The state can provide long-term visibility on wheeling and banking provisions throughout the lifetime of the project.

Further, it said that repowered wind clusters can be integrated with other renewable energy to develop capacity for round-the-clock (RTC) or peak power and thereby design tariffs to appreciate business value.

The state can also support the identification of off-takers and introduce a target for blending during the initial years.

Manufacturing green technology

The roadmap recommended lowering the tax burden on the new component to incentivize manufacturing, which includes import duty concessions for the first two years until a supply chain is built.

It said that other incentives, tax benefits, low-interest loans, and setting up trade institutions in various wind markets could be considered to support exports.

Environmentally friendly manufacturing

Additionally, the state can promote green energy for energy-intensive industries like textile, iron and steel, paper, cement, plastic, and fertilizer.

Tamil Nadu’s top 1,000 industries with 18,250 MU electricity consumption is overwhelmingly dominated by thermal power, with renewable energy making up only 16% of the consumption share.

Green Tracker

There is a growing demand among financial institutions, including multilateral development banks, for investments that are linked to social, environmental, and climate goals.

The roadmap recommended that a green transition tracker and dashboard be designed and implemented by the state. The tracker can help monitor emission reductions, which can be converted to carbon credits and used in the carbon market.

The tracker may also reduce the cost of financing by reducing the need for investor due diligence.

In July, the Ministry of Power issued a policy mandating wind RPO to boost installations and reduce the cost of power generated from wind projects.

The Ministry of New and Renewable Energy (MNRE) recently issued a draft tender for leasing sea-bed areas to develop 4 GW offshore wind power projects off the coast of Tamil Nadu.