Tangedco failed to avail clean development mechanism: CAG

Tamil Nadu is the leading state in the country in terms of renewable energy generation capacity of over 8,700 MW. In its report tabled in Parliament recently, CAG said that despite Tamil Nadu Electricity Regulatory Commission direction in 2009 to share the CDM benefits between the promoter (RE producer) and the distribution licensee (Tangedco), the utility had failed to initiate action for modification of the power purchase agreement providing for sharing of CDM benefits. In the tariff order for wind energy, TNERC stipulated that CDM benefits should be shared between the promoter and the distribution licensee, starting from 100 per cent to the promoter in the first year till the sharing becomes equal to both the promoter and Tangedco in the sixth year.

CAG said that test check of 33 wind, biomass and cogeneration projects, which had energy purchase agreements with Tangedco and which had received Certified Emission Reductions (CERs) equivalent to 42,97,177 credits from UNFCCC (United Nations Framework Convention of Climate Change) during the period 2007-08 to 2012-13 revealed that in none of these cases, Tangedco initiated action for modification of the agreements providing for sharing of CDM benefits as per the directions of TNERC. “Tangedco neither received nor claimed its share of CDM benefits from the promoters as of March 2014,” it noted.

The CAG said the Detailed Project Report for the cogeneration plants in the co-operative sugar mills being implemented by Tangedco envisaged that each of the plant with 172 days of operation with bagasse would fetch around 31,000 Certified Emission Reductions per annum valued at Rs 40 lakh.

However, audit observed that Tangedco did not even register the plants with UNFCCC for claiming CDM bene

fits. Similarly, none of the 18 Small Hydro Power projects implemented by Tangedco, which were entitled for CDM benefits, had availed the benefits so far,” it pointed out. A senior Tangedco official said that lack of clear monitoring system on the RE companies claiming the CDM benefits was major issue. The official said that steps were being taken to modify the PPA. “It will be discussed in the state advisory committee meeting of TNERC,” the official said.