How industries shifted to captive power generation

With the recent power cuts due to coal shortage making the headlines, the spotlight has turned to ho

With the recent power cuts due to coal shortage making the headlines, the spotlight has turned to how some industries in Tamil Nadu has established captive power plants over the years to meet their requirements.

For instance, Ramco Cements uses a combination of thermal, wind and other sources across its plants for captive power generation, which helps it meet 100% of its power requirement. Its captive mix includes 170 MW of thermal power, 25 MW of waste heat recovery system and 170 MW of wind energy. It also has a diesel generator capable of producing 70 MW-80 MW in backup power.

A.V. Dharmakrishnan, CEO, Ramco Cements, says the company is not affected by coal shortage and has a sufficient stock. But higher coal prices have pushed up the cost of captive power generation.

“Industries are trying to source competitive cheaper power. That is the main reason for people going for other alternatives like captive power. Even the Electricity Act, 2003, envisaged this,” according to A.D. Thirumoorthy, Member, State-level Renewable Energy Committee.

To start with, mostly textile mills went for captive power. Saving on the inputs is the competitive edge in the sector. Besides cotton, the major inputs are power and labour. So, they are trying to save on both, he explains. Mr. Thirumoorthy says the textile mills invested a lot in wind energy; looking at the benefits, other industries like iron and steel went for captive generation.

Industry representatives say captive power generation enables them to meet 50%-100% of their power requirements. “Captive power generation has grown significantly over the last 25 years. Prior to that, most industries were using diesel generators. A lot of investments were made in wind energy, which was promoted through attractive tax policies by the Central government and specific policies by the State government,” says Illango, director, Tamil Nadu Electricity Consumers Association (TECA), a representative body of industrial electricity consumers in Tamil Nadu. Though incentives have been cut, industries still view wind and solar energy plants as viable options to meet their power needs, he adds.

K. Venkatachalam, chief adviser, Tamil Nadu Spinning Mills Association, says the textile industry went for wind energy for captive generation. But wind being seasonal, many players are considering the option of solar energy. Some of the big industries have earlier gone for coal power plants. However, high coal prices have forced them to keept their plants shut. They are tapping into the State grid, adding to the demand on Tangedco, he says.