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India reinstates wind power incentive scheme

India’s wind sector should see a boost with the reintroduction of an incentive scheme designed to increase energy output

Withdrawal of an icentive scheme in 2012 led to a fall in new wind installations in the last 10 months

India will reintroduce Generation Based Incentive (GBI) scheme to give a much needed boost to its wind power sector, finance minister Minister P. Chidambaram announced.

Rs. 800 crore will be given to the ministry of new and renewable energy (MNRE) for this purpose. “The non-conventional wind energy sector deserves incentives,” Chidambaram said

India’s wind power sector has been calling for a reintroduction of GBI since it was withdrawn in April 2012. The withdrawal led to a fall in new installations in the last 10 months, industry sources told local media. The approximate investment for one MW is Rs. 6 crore and the country lost about Rs. 10,000 crore in wind turbine installations this year alone.

At a budget meeting in Chennai, Indian Wind Turbine Manufacturers’ Association (IWTMA) chairman Ramesh Kymal said: “We are very relieved… the industry was bleeding and about to die… this will be an encouragement.”

Describing the reintroduction of GBI as a timely intervention, he said it would rejuvenate the sector with more investments. It assumed greater significance as an ambitious capacity-addition plan was being pursued in the current Plan period.

According to the sources, new wind energy installations in the country so far this fiscal contributed just 1,200 MW, against 3,200 MW the previous year. By March-end, another 200 MW may be added.

Kymal, who is chairman and managing director of Gamesa Wind Turbines Pvt. Ltd., and Indian Wind Power Association chairman K. Kasthoorirangaian sought reintroduction of the accelerated depreciation too.

Kymal welcomed the budgetary announcement to provide low-interest loans for renewable energy projects. Mr Chidambaram had said the government would provide funds from the National Clean Energy Fund to the Indian Renewable Energy Development Agency to on-lend to viable renewable energy projects. The scheme would have a life span of five years.

“It should announce the modalities of the schemes at the earliest and these benefits should be available even to those who invested in one wind-mill,” Kasthoorirangaian said.

D.V. Giri, secretary-general, IWTMA, said that once there was clarity on the modalities of the GBI scheme, the response from the independent power project segment would be positive.