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Suzlon Chairman Tulsi Tanti wants sops for wind SMEs to continue in India

According to reports, Suzlon Energy Ltd’s Chairman, Mr Tulsi R. Tanti, wants continuity in accelerated depreciation benefits for small and medium entrepreneurs (SMEs) investing in wind energy projects.

The wind energy sector has traditionally attracted investments under this route, resulting in a marginal benefit to the SMEs due to the offsetting impact of accelerated depreciation on tax holiday. However, it is losing its sheen as the focus has turned on incentivising generation of power from renewable sources rather than on capacity building.

SMEs form Suzlon’s largest customer base in India, accounting for 30 per cent of its business.

“SMEs have created a real success story in the Indian renewable sector. Why don’t we leverage it?” Mr Tanti asked.

Wind Energy currently accounts for 3 per cent of India’s total power produced. It is expected to go up to 7.5 per cent by 2020. The investment in wind energy is at $2.92 billion a year and is expected to grow to $9.55 billion by 2020.

Further, Mr Tanti said that the pricing of renewable energy certificates (RECs) should be left to the market mechanism. Though enabling policies have been in place, Mr Tanti said that State utilities need to play a more proactive role for REC mechanism to succeed.

Currently, the Central Electricity Regulatory Commission decides the floor and the ceiling price for the REC trade. The renewable industry is worried over the prospect of CERC revising downwards the indicative rates for 2012-15.

“Once the market for RECs matures, the pricing will determined by the market forces,” Mr Tanti added. Suzlon will announce its June quarter results on July 30.

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