The Hindu Business Line : ‘Investors can look forward to performance-based sops’

Chennai, June 12 “Outlay based subsidies are out and outcome based subsidies are in,” according to Dr Kirit Parikh, Member (Energy), Planning Commission, meaning investors in renewable energy projects can look forward to performance based incentives rather than investment subsidy.

Addressing Green Tech 2008, a two-day conference on renewable energy that began here today, Dr Parikh said that it was imperative that energy from renewable sources is increasingly exploited for long-term growth. But to encourage development of technology, investments in projects the Government needs to put in place policies and incentives to support the costs.

The broad approach would be to provide incentives for the outcome – performance – rather than subsidising investments is in place for wind energy in the form of accelerated depreciation. Rewarding performance would support competitiveness and efficiency. Industries should see this as opportunity. The policy dictating the shift in support could happen soon, he said.

Fuel challenge

India consumes about 500 million tonnes oil-equivalent of energy to drive a growth of about 8-9 per cent and by 2030 it would need about 1,700-2,000 million tonnes of oil equivalent of energy. Power generation capacity should grow about five times from the present 160,000 MW. But the country is short on fuel resources – it produces about 33 million tonnes of oil against an annual consumption of about 120 million tonnes. Coal resources would be depleted over the next two-three decades, he said.

Power Trading Corporation

Mr T.N. Thakur, Chairman and Managing Director, PTC India Ltd, said that the company plans to offer holistic services for renewable energy including participating in joint ventures and financial assistance to renewable energy projects. It has equity participation in wind and biomass projects and is considering taking a stake in a solar cell manufacturing plant.

Government policies should support growth of renewable energy ensuring compliance to like renewable energy portfolio standards. This would ensure power utilities source a portion of their power from renewable sources, he said. Also, support through soft loans to encourage investments will help to bring down dependence on conventional energy, Mr Thakur said. Green Tech 2008 is being organised by the CII – Sohrabji Godrej Green Business Centre, a joint initiative of the Confederation of Indian Industry, Godrej Group and the Government of Andhra Pradesh.

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