According to reports, policy gaps, due to the lack of political will, is the primary reason for the reluctance of multilateral funding institutions supporting wind energy projects in India, according to Jitu Shah, Advisor, Asian Development Bank.
The industry has to bring to bear the public pressure on policy makers to address the issues. There is acute shortage of power, but the increase in generation capacity cannot happen without appropriate policies.
Jitu Shah, addressing the Wind Power India 2012, an international conference and exhibition on wind energy, said lack of funds is not an issue. But the Government has to gear up to access resources. For instance, there is the Green Climate Fund proposed under the United Nations Framework Convention on Climate Change to fund green projects in developing economies.
Whether it is to be $100-billion as planned or less, “we should prepare arguments to take a share.” The industry has no direct access to the World Bank. Against a targeted annual installation of 7,000-8,000 MW of renewable energy generation capacity, the actual generation is just 2,000 MW.
What is needed is a “phenomenal policy change for the long-term,” he said. On the issue of enhancing bankability of wind energy projects, G.M. Pillai, Director General, World Institute of Sustainable Energy, said electricity regulators should put in place a payment security mechanism to ensure that State Electricity Boards pay tariffs to power generators on time. In Tamil Nadu for instance, there is a delay of over 14 months.
Another issue is the withdrawal of incentives, he said. While in the long-term the industry needs to “stand on its own feet,” it is not right to do away with both generation-based incentive and accelerated depreciation simultaneously. Industry needs the support for two-three years.
Conventional power tariffs are bound to increase as fossil fuel prices and supply issues grow.
Renewable energy will inevitably be needed for energy security, he said.