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Wind power companies sore over new forecasting rule

According to reports, wind power generators are upset over a new requirement that the Central Electricity Regulatory Commission has brought into force from July 1, which requires them to forecast their next day’s power generation. It was practically impossible to do that, and the penalties that would be levied on them as a consequence of non-compliance could chip away 12-15 per cent of their profits, said Sunil Jain, President, Wind Independent Power Producers Association of India.

The Association had asked for some more time to put in place the system, but to no avail. “We said we will give the forecast, but please don’t levy penalties yet,” Jain said. Jain noted that the wind industry was already going through a rough patch, mainly due to the withdrawal of two key incentives — the ‘generation-based incentive (GBI)’ and the ‘accelerated depreciation (AD)’. These (only one of which could be availed of by the wind power producer) were withdrawn from April 1, 2012.

As a consequence, wind installations fell to 1,700 MW in 2012-13, compared with 3,200 MW in the previous year.

In his Budget speech of February, Union Finance Minister P. Chidambaram had promised to bring back the GBI scheme.

This created a positive buzz in the industry and many wind turbine manufacturers, such as Gamesa, Regen Powertech and Inox, reported healthy order booking.

However, since the GBI has still not been formally brought back, investors are asking the manufacturers to hold back production against their orders. Similarly, there has been some talk of the AD — a tax-saving benefit — being brought back, but wind investors are keeping their fingers crossed.

While the continued non-availability of these incentives is affecting fresh installations, the ‘scheduling and forecasting’ rule is hurting the companies that are already generating power. This, in turn, it is feared, will impact financing.

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