According to reports, the Indian Wind Power Association (IWPA) has appealed to the Prime Minister Manmohan Singh to reinstate incentives to wind power manufacturers that the Centre had withdrawn in the last Union budget, to increase private investment in the wind energy sector.
In a telegram sent to the prime minister on behalf of 1,350 wind power investors, the IWPA has pleaded that the industry will collapse if the government didn’t offer accelerated depreciation (a tax cut offered to domestic firms to offset costs incurred due to replacement of worn-out equipment and repairs) and generation-based (subsidy for each unit produced) incentives that were available for domestic and foreign investors respectively. The industry is expected to lose investment worth Rs 12,000 crore in 2012 due to revoking the incentives, said K Kastoorirangian, chairman of the IWPA. He pointed to Suzlon (a wind power firm) share prices falling from Rs52 to Rs12 as an indication of the impending collapse of the industry.
The Centre had scrapped the accelerated depreciation and generation-based incentives from April 1 this year. In 2011-12, wind power sector attracted private investment worth Rs 19,200 crore leading to the generation of 3200mw. Citing data from the ministry of non-renewable energy website, Kastoorirangian said that only 522MW or Rs 3132 crore fresh investment was added by the wind power industry compared to 1350MW (Rs 8,000 crore investment) the previous year.
Kastoorirangian claimed that when wind projects were always on schedule whereas thermal & hydel projects were faltering due to lack of coal, clearances, shortage of equipment, failure to get environmental clearance and localised protests. He added that 43% of installed capacity in wind energy (7,000MW of 17,800MW of installed capacity) in the country is in Tamil Nadu. He further said while the state saw an addition of 450MW in wind energy last year, only 80MW has been installed since the government scrapped the initiatives. The country will require additional energy at the rate of 10% every year, which would require that fresh investment in windmills at the rate of 10% to 14%, he added.