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Generation-based incentive critical for wind industry: Kymal

M. Ramesh
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Ramesh Kymal, Chairman, Indian Wind Turbine Manufacturers’ Association.
Bijoy Ghosh Ramesh Kymal, Chairman, Indian Wind Turbine Manufacturers’ Association.

The wind power industry in India is tottering and only a generation-based incentive scheme — announced by the Government but yet to be operationalised — can ensure the survival of the industry, according to Ramesh Kymal, Chairman, Indian Wind Turbine Manufacturers’ Association.

In the first half of the current year, India added only 851.35 MW of wind power, just 60 per cent of the 1,402.66 MW achieved in the same period of last year. The fall has been attributed to the removal of two key incentives that were available to those who put up wind mills — accelerated depreciation and generation-based incentive. The figures also underscore the challenges wind power developers face in the two key States — Tamil Nadu and Gujarat — where capacity additions have fallen by 52 per cent and 75 per cent respectively.

Kymal expects that Tamil Nadu may not add more than 200 MW in the whole of the year — just a fifth of last year’s achievement. Investors are shifting to other States such as Maharashtra, he said.

“This year, India will be lucky to have an additional 1,500 MW of wind power capacity,” Kymal said. (Last year, India added close to 3,200 MW). He said while on the one hand developers were not coming forward to put up projects because of policy issues, on the other, even projects that were announced were finding it difficult to raise finance.

Under a previous GBI scheme, the Government of India gave 50 paise per unit of wind power generated, but this was subject to a cap of Rs 62.5 lakh per MW of capacity. The scheme was also available up to a coverage of 4,000 MW or March 31, 2012, whichever occurred earlier. On March 31, 2012, the scheme ceased, although by then it had covered less than 2,000 MW. Since then, the industry has been clamouring for another version of the scheme.

Kymal said restoration of the generation-based incentive would help remedy the situation and save thousands of jobs. He pointed out that the Ministry of New and Renewable Energy has recommended a GBI of 82 paise per unit, up to 13,500 MW of capacity and said the recommendation was stuck with the Planning Commission. “Nobody seems to be anxious about the drop in capacity additions,” he said.

The Minister for New and Renewable Energy, Dr Farooq Abdullah, has said the industry would get the GBI, but the papers have yet to go from the Planning Commission to the Ministry of Finance.

While the industry is fairly certain that the GBI will come — after all, a Union Minister has said so in public — their fear is by when and in what form would the incentive come. Any further delay would harm investments. And if the quantum is, say 50 paise a unit, rather than the 82 recommended by MNRE, the scheme would be practically useless, an industry leader said.

ramesh.m@thehindu.co.in

(This article was published on October 12, 2012)
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