With the Tamil Nadu Pollution Control Board (TNPCB) fixing the public hearing for the Ennore Thermal Power Station Expansion project on February 25, Climate Risk Horizon (CRH) has come out with a report of the financial burden the project would put on the State government as well as the Electricity Department.
CRH, relying on data available in the public domain, has prophesied that for the Tamil Nadu Generation and Distribution Corporation Limited (Tangedco), already engaged in the construction of Udangudi and two more power projects, pursuing this 660-megawatt (MW) project in the already polluted north Chennai could cause a debt burden of ₹4,479 crore out of the total projected cost of ₹6,398 crore. The financial outlay of the Udangudi project is ₹26,627 crore.
The study, comparing the prevailing power demand with the demand growth rate of electricity for the coming periods, has found that Tangedco would be made to pay more than the total cost of the project in fixed cost alone within seven years after commissioning the thermal power plant.
Fixed cost is the cost incurred by a power plant whether it is operated or not. As per the study, the fixed cost in the initial years would be in the average of ₹1,100 crore, resulting in a total outgo of ₹8,488 crore for seven years.
The study warns that Tangedco would also find the cost of production from the Ennore Expansion Project to be as high as ₹7.37 kilowatt per hour (kwh) even if the plant is operated at an optimistic 75% capacity. But as per the data, thermal plants are operated at 55% to 60%, which when applied to the Ennore expansion plant puts the cost of electricity production at nearly ₹9 kwh.
Under such heavy cost burden, CRH suggests the State government should aggressively pitch for renewable energy with battery storage capacity. As per the study, the current cost of renewable energy with battery storage is estimated to be less than ₹5 per unit, even while standalone renewable energy is currently less than ₹3 per unit.
The study, citing JMK Research & Analytics, estimated renewable energy with a storage tariff of ₹4.97 in the State in 2021, and predicted that this could drop to as low as ₹3.4 in 2030. A national level analysis by Lawrence Berkeley National Laboratory has estimated solar plants with storage tariffs of ₹3.30 by 2025.
A senior official of Tangedco said the State had proposals for executing renewable energy to the extent of 2,230 MW. Also, the State government has indicated that only ongoing thermal projects, which have been in the pipeline so far will be executed and that no new thermal project will be set up in the State in the future, he added.
