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New wind energy projects may have to pay wheeling charges

The State government is seriously thinking of doing away with the exemption of wheeling charges for future wind power projects. The State made a significant capacity addition of 3,000-plus Megawatts (MW) in the last two years.

The Wind Power Policy (WPP) - 2015-20 envisaged complete exemption from transmission and distribution charges for wheeling of wind power for captive use or third party sale within the State.

The idea is to make the wind power producers pay the charges on the premise that the government no longer needs to forego the revenue after it became an attractive market where the upcoming projects can put up with the lack of the exemption having secured a steady revenue stream in spite of low tariffs.

The exemption is for 10 years from the date of commissioning but not for evacuating for sale outside the State.

A senior official of AP-Transco told The Hindu that: “Currently we are not charging transmission charges for wind power. In future, the government is planning to charge.”

The AP-Transco charged ₹76.6 for 1 KW per month in 2015-16, ₹91.36 in 2016-17 and ₹95.37 in 2017-18 and ₹94.44 in 2018-19, according to reliable sources.

The likely decision will not be applicable to the existing projects as the agreements cannot be tweaked during the operative periods.

The State government has the right to undertake a mid-term review of the WPP in view of any technological breakthrough or to remove any inconsistency with the Electricity Act 2003.

According to an official in the Eastern Power Distribution Company Limited, the government intended to incentivise the generation of solar energy more than wind due to the latter’s unreliability. He said even during peak wind season from September to March, there would not be more than 30 cloudy days.