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While I was doing some small assignments for TNEB a few months back, many senior folks at TANGEDCO openly complained to me the fact that the banking facility provided to wind power plants. Well, the logic behind the complaint was as follows: Wind farms typically produced power when there was an oversupply in the southern grid. As a result, TNEB was getting little or no money from the power produced. However, they had to pay Rs 3.39 per unit to the wind power producers. When banking is introduced, this loss becomes worse as the captive power producer takes the electricity at a time of peak demand, thereby depriving TNEB of a much higher opportunity (could be as high as Rs 6 per unit).

Well, the wind power industry no doubt has its own story to tell in this regard, but I am not getting into that now. It is of course ironical that I work both with the TNEB and the wind power industry, so I get to hear both sides of the story, sometimes one in the morning and the next in the evening!

Anyway, TNEB, rather than doing away with banking seems to have adopted a middle of the road strategy by hiking the cost of banking rather than doing away with it all together.

According to this report, the new rates will mean that TNEB gets an additional Rs 600 crores per year? That is a neat amount, undoubtedly very much required by a utility deep in the red.