Saddled with debt, Tangedco eyes virtual metering to pare loss from farm power supply

CHENNAI: In a proposal that is likely to help reduce the debt burden on Tangedco, the Tamil Nadu Electricity Regulatory Commission has mooted granting nod to set up solar power plants that would help generate electricity at a much lower cost and thus offset the substantial loss that the utility is incurring on account of free power supplied to farmers.

Even after factoring in the subsidy extended by the State government, Tangedco incurs a loss of Rs 3.89 for every unit of free energy supplied to agricultural consumers, which adds to the already huge debt burden. If the proposed virtual net metering (VNM) mechanism for grid-interactive solar PV generating system (GISS) comes into effect, the utility would be able to overcome the losses on account of agricultural power supply.

Tamil Nadu Electricity Regulatory Commission (TNERC) recently notified revised draft regulations of GISS, which allows Tangedco (or any other distribution licensee), government and local bodies to set up solar power units with a minimum capacity of five kilowatts through VNM for their consumption and against the consumption of subsidised categories.

This is how it works: Under the VNM system, Tangedco can set up solar parks or plants on its land, leased land, terrace and floating solar on water bodies with or without battery energy storage system. The energy thus generated and metered at the metering point may be adjusted from the annual consumption of subsidised categories after deducting the line loss, banking charges and wheeling charges.

Explaining how it benefits the utility, a senior Tangedco official said VNM would be a boost for Tangedco, which planned to solarise 1,685 segregated agricultural feeders. "Solarisation of agricultural feeders has the benefit of energising the feeders through solar, which is a cheaper source of renewable energy, resulting in cost optimisation of the subsidised agricultural sector. As solar plants are to be developed at the distribution level, the voltage profile will improve and line loss will reduce," the official said.

The solar plants under VNM would be set up either in capex model or the RESCO model. Under capex model, Tangedco, government departments or local bodies would make upfront investments and own the unit, while in the RESCO model, they pay the developer only for the electricity generated.

There is a rider, however – only government departments, undertakings and local bodies which has no electricity bill default can set up solar plants under VNM mechanism. If that criterion is met, they would be able to list out service connections of the respective government office and local bodies and the ratio of sharing solar generation with such connections to be adjusted against their bills.

The utility had also announced an ambitious plan to set up 20,000 MW solar energy power stations and 10,000 MW battery storage systems across the State. In the first phase, it has planned to establish a 6,000 MW solar power plant and a 2000 MW battery storage system and has identified more than 4,000 acres of land in various districts for the establishment of plants, and acquisition is under process.