Tamil Nadu has the potential to install 3.5 GW of Floating Solar Photovoltaics (FPV) capacity by utilising 57 of its large reservoirs, finds a recent report by think tank Climate Risk Horizons. This FPV capacity would be enough to replace electricity from the expensive North Chennai I and Tuticorin coal power plants. Electricity from FPV is estimated to cost Rs. 3.16/kWh, which is less than half the average tariff of state-based coal thermal power plants (Rs. 7.12/kWh) and 30% lower than the average tariff of central-sector coal plants.

“The lower electricity tariffs from floating solar can generate savings of INR 3,211 crore annually, and over INR 16,000 crore over a five-year period. This amount is equivalent to 50% of TANGEDCO’s losses in 2023-24, which stood at INR 6,920 crore, and represents a significant cost-saving opportunity for the state,” said Ashish Fernandes, CEO of Climate Risk Horizons and co-author of the report. After years of losses, TANGEDCO had a total debt of INR 1.8 lakh crore before bifurcation; the newly created distribution arm Tamil Nadu Power Distribution Corporation Limited (TNPDCL) now has INR 90,000 crore in debt.

In 2022, the Tamil Nadu government announced it will add a total of 20 GW of solar and 10,000 MW of battery storage across Tamil Nadu by 2030. FPV, which involves installing solar panels on a floating structure on a body of water, can help achieve or surpass this target. The report highlights some distinct advantages of FPV systems: they do not require land acquisition and by providing shade they reduce water evaporation, increasing freshwater availability for multiple purposes.The analysis considered covering only 40% of the minimum water body area with floating solar. The report also flags that special care would need to be taken around water bodies in ecologically critical areas and that existing community rights would need to be given due importance in case of competing uses of reservoirs such as for fishing or transport.

“Older, more expensive coal plants in the state such as Tuticorin and North Chennai will need to be shut down in the near future. Planning for floating solar now will allow the state to replace this power with cheaper electricity, delivering a win-win for the household and industrial consumers, as well as the state’s budget,” said Prabhakaran Veerarasu of Pooviulagin Nanbargal.

“This analysis shows that the state has huge potential in floating solar, and this would not only attract investment and employment opportunities, it can lower electricity costs as well. Tamil Nadu has the goal of becoming a $1 trillion economy and has ambitious renewable energy targets as part of its Climate Change Mission - meeting both goals will require a lot of new RE capacity, including solar rooftops, floating solar and traditional ground mounted systems,” said Hari Subbish Kumar of Asar Social Impact Advisors, which is working with TANGEDCO to popularise solar rooftops in Chennai.

The state government is planning to add 100 billion units of green energy by 2030 and aims to achieve carbon neutrality well ahead of the national target of 2070. Meanwhile, Tamil Nadu’s electricity distribution company, TANGEDCO, has been struggling with financial losses due to costly PPAs with coal plants, rising prices of coal, and under recovery of dues. The DISCOM has resorted to three tariff hikes since 2022 to reduce its losses, passing on the burden of high coal tariffs to end users.

Harshit Sharma; harshit.sharma@climateriskhorizons.com
Prabhakaran Veerarasu: prabhakaranenvi@gmail.com
Ashish Fernandes: ashish.fernandes@climateriskhorizons.com