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Without incentives, India wind-power addition slides by close to half in April-Dec

According to reports, in April-December 2012, India added 982.5 MW of wind-power capacity, less than half of the achievement of the previous year of 1,909.26 MW.

The withdrawal of two incentives — accelerated depreciation and generation-based incentive — has been mainly responsible for this fall, industry experts say. (An investor could have availed himself of one or the other of these two.) However, there are other reasons, too. Tamil Nadu, the windiest State, has been having serious evacuation problems, as the transmission infrastructure is just not enough to take the electricity generated by the windmills.

Also, the renewable energy certificates (RECs) market is tepid. RECs are tradeable instruments given to renewable-energy producers who opt not to avail themselves of higher tariff or other concessions and are bought by ‘obligated entities’ who are mandated by law to buy either (costlier) green power or RECs. A big problem faced by the renewable-energy industry today is that the obligated entities (mainly, State-owned electricity distribution companies) are not meeting their obligations and are not being penalised for that.

The tepid REC market has affected financing, says D.V. Giri, Director-General, Indian Wind Turbine Manufacturers’ Association.

There is indeed a strong likelihood of these incentives being brought back. The industry is keenly awaiting the notification on generation-based incentive any time and on the accelerated depreciation in the upcoming Budget, Giri told Business Line. However, even if the incentives come now, the industry could at best hope to add another 600 MW in the fourth quarter. This means that total wind-power installations in the current fiscal year may be around 1,600 MW, compared with 3,170 MW the previous year.

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