Panchabuta, has earlier talked about the Generation Based Incentives (GBI) scheme for grid connected wind power projects with the objective of broadening the investors base by attracting FDI and independent power producers.
During FY11, the country is likely to add close to 2,200 MW of new wind capacity according to officials and around 450 MW is expected to be covered under GBI. The Generation Based Incentive Scheme (GBIS) provides that the energy producer will be entitled to an incentive payout of INR0.50 per unit of electricity fed into the grid.This incentive payout will be over and above the tariff approved by the State Electricity Regulatory Commission (SERC), and will be paid on a semi-annual basis.
The scheme is available for any wind energy producer commissioning wind turbines between 17 December 2009 and 31 March 2012 for a total installed capacity of 4000MW during this period under the scheme.
Recently, there have been reports that the GBI will continue beyond March 2012. As readers of Panchabuta are aware, India had 11,800 MW of wind power installed at the end of March 2010 according to the Indian Wind Energy Association, making it the world’s fifth largest wind power market.
The installation in India being range bound between 1470-1750MW a year over the last five years and the installed capacity for 2009-10 was around 1565MW. This year the expected capacity is close to around 2200MW according to officials.
According to research by RNCOS, favorable climate conditions and regulatory support paved the way for investors and companies to establish large number of wind power plants, which propelled capacity additions and uplifted wind power outlook in the overall renewable energy market. Considering the current industry trends and futuristic developments, the report further revealed that cumulative installed capacities will advance at a CAGR of 14% during FY 2011-FY 2014.
The research identified that wind power seems to be the ideal choice for the nation as it is of moderately low cost compared to other renewable sources. Moreover, it is a pollution free source of energy. With technological advancements, wind will become an extremely competitive source of power generation, thus creating immense business opportunities for manufacturing and material procurement companies. This, in turn, will drive the growth of the manufacturing sector of the nation.
Further, improving performance and reliability of wind turbines and decreasing gestation period of installation has positioned India as one of the most dynamically growing wind energy markets in the world. The wind power contributes 70% of the grid interactive renewable power installed in India, which is expected to remain almost constant in the coming years. With the continuous public and private sector participation, the sector is all set to dynamically expand in the country, which will lure international majors for plant set up and business execution.
This is quite clear from the recent renewable energy capacity additions planned by Tata Power, Reliance Power over the next five years and the role of wind in the same as well as the emergence of IPPs like Caparo Energy that are betting big on the GBI and now more recently the Renewable Energy Certificates.