According to reports, it is indeed encouraging and a great boost for the wind energy sector that generation-based incentive has been reintroduced for which Rs 800 crore will be allocated to the ministry of new and renewable energy.
It is heartening to know that low interest rate funds will be provided from National Clean Energy Fund for a period for five years. These steps are sure to encourage not only domestic investors but also foreign investors, who will recognise wind as a potential investment opportunity.
The power sector in India, with an installed capacity of 211.766 gw is the fifth largest in the world. India, also happens to be the fifth largest consumer in the world. According to the US department of energy, US tops the list with 16 per cent consumption followed by China, Russia, Japan and India at four per cent.
Despite being the fifth largest producer in the world, India continues to have a huge demand for power. The peak demand shortage averages to 10 per cent. India’s GDP is growing around six plus per cent of which industrial output contributes 16 per cent of India’s GDP and consumes about 45 per cent commercial energy.
In India, of the 211.766 gw installed capacity, 141.713 gw is produced from conventional energy sources like coal, gas and diesel. Coal is the largest contributor in the total mix of energy sources. However, coal is not a sustainable solution. The domestic coal reserves are not enough to match up to the rising demand and importing coal is a costly proposition both in terms of price and environment.
While there is a steady increase in demand for energy, fossil resources like coal, oil and gas are depleting. It is good to hear that the finance minister has provided a subsidy of Rs 65,000 crore of petroleum subsidy.
On the other hand, global warming is a growing concern due to carbon emissions. Correctly, the finance minister has acknowledged that we should depend less on coal for power demand. One of the logical solutions to these problems is sustainable, clean wind energy. Wind is cheaper as compared with thermal power like coal, gas and nuclear, even without factoring the costs of environmental impacts.
Moreover, wind power is at grid parity, is scalable, has no fuel risk, has shorter period of delivery cycle and has low gestation period of six months to one year. To add to this, wind energy does not depend on any subsidies.