Generation-based incentive critical for wind industry: Kymal
The global auditing and consulting firm Ernst & Young has been roped in by the Indian Wind Turbine Manufacturers’ Association (IWTMA) to bring out a report that will give sufficient data to change the ‘negative perception’ about the wind industry. E&Y is expected to produce the report in four-six weeks.
The wind industry is seen by some as a subsidy-driven, tax-saving industry that has little relevance in the overall energy mix of the country.
Even before the ‘accelerated depreciation’ incentive was available to wind power producers (under which they could write off 80 per cent of the value of the machine as depreciation in the first year, thus bringing down taxable income), the wind industry was making a meaningful contribution to the economy in terms of generation of clean power and jobs.
The negative perception of the wind energy industry gained ground at a time when those who put up wind mills were only those who sought the ‘depreciation benefits’. Now, although perceptions about the industry have changed a lot, there still linger some vestiges of the old impression.
Now, IWTMA wants to change it — with E&Y’s help.
Apparently, IWTMA has been stung by the ‘oh-you-guys’ kind of remarks of bureaucrats in the Government of India. What is also bothersome is that the much-promised ‘generation-based incentive’ is stuck in red-tape, although the industry is suffering this year due to tepid interest among wind power producers.
Confirming the engagement with E&Y to Business Line, the Chairman of IWTMA, Ramesh Kymal, said the wind industry’s achievement in India was as significant as the ‘green revolution’ (agriculture) and the ‘white revolution’ (milk production). “Quietly, we have been adding about 3,000 MW every year, and have reached 18,000 MW,” Kymal, who is also the Chairman and Managing Director of Gamesa India, said.
(But in contrast to the 18,000 MW, the reputed American institution, Lawrence Berkeley National Laboratory, last year estimated India’s wind power potential at 600,000 MW.)
In the current year, however, due to the removal of incentives and a plethora of other issues (such as grid inadequacy and policy uncertainty in some States), India would be lucky to add 1,500 MW this year, he said. Last year, the country did 3,168 MW.
There are a lot of misconceptions about the wind industry in India, Kymal said, such as it is a tax-avoider and survives only on subsidies. The E&Y report will seek to change this perception “by presenting the facts.”
More importantly, the report will provide data to the Government to prove that it actually gains by giving incentives such as the GBI (generation-based incentive) — in terms of subsidies on fuels, and savings achieved on avoidance of fuel imports.
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