The Hindu Business Line : Renewable Energy Ministry plans new incentive schemes

Bangalore, July 20 The Ministry of New and Renewable Energy (MNRE) plans new incentive schemes to attract private investment of at least Rs 60,000 crore, over the next five years, in the renewable energy sector, according to Mr V. Subramanian, Secretary, MNRE.

The new incentives, which include long-term tax breaks and provision for green certificate, will come in place of the existing incentive of allowing 80 per cent depreciation on equipment installed for generating green power in the first year, Mr Subramanian said.

Certificates

Green certificates, also referred as Renewable Energy Certificates, are tradable papers certifying that certain electricity is generated using such energy sources.

The Ministry has set a target of 12,000 MW fresh capacity addition in the next five years, including 7,000 MW from wind energy segment, 2,500 MW from hydel sources and the rest from co-generation including rice husk and bagasse.

The current installed capacity is 10,500 MW which supplies 26 billion units of electricity to the grid.

“We are targeting additional capacity of 12,000 MW over the next five years. The investment will vary depending on the technology from Rs 5 crore per MW to Rs 15 crore per MW,” Mr Subramanian told Business Line on the si delines of Solar India 2007, a seminar on solar energy. According to him, the Ministry is likely to present the new incentive structure to the Cabinet in the next three to four months and expects to implement it before the next Budget.

Working on modalities

The Ministry is currently working on the modalities of creating a market for green certificates in the country. According to Mr Subramanian, private players, generating power from renewable sources, will be offered the certificates and they in turn can sell them to distributing companies not generating enough electricity from green energy.

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