Piyush Goyal Holds Discussion with Stakeholders in Wind Sector
5 Dariya News
New Delhi 01-Jul-2014
Union Minister of Power, Coal and new Renewable Energy Piyush Goyal had an interactive meeting with all the stakeholders in wind sector here today. The representatives from four wind associations i.e. Indian Wind Turbine Manufacturers Association (IWTMA), Wind Independent Power Producers Association (WIPPA), Indian Wind Energy Association (InWEA) and Indian Wind Power Association (IWPA) were called for discussions. The officers from MNRE, IREDA and C-WET were also present.Detailed discussion on various issues in the sector was held and suggestions for remedial solutions were invited. The industry emphasized that Accelerated Depreciation (AD) benefit is not a loss to government rather it is a deferment of income tax. In addition, government loses other taxes (MAT, service tax, central sales tax etc.) in a situation of no investment because of absence of AD.
Therefore AD benefit should be restored. It was requested that government should increase funding for Generation Based Incentive (GBI) as there is pending claims of GBI of the order of Rs. 300 crore. Augmentation of transmission and evacuation facilities by state government is another major issue, which needs to be improved. There was a loss of around 2.1 Billion units in Tamilnadu alone during windy season (May-August) last year on account of putting the wind turbines off-grid. In order to increase the corpus under National Clean Energy Fund (NCEF), the Cess on coal may be increased fromRs.50 to Rs.100 per tonne. It was suggested that there should be long term sustainable regulatory framework so that bigger projects could be planned. Requirement of enforcement of Renewable Purchase Obligation (RPO) was emphasized by the industry. This will create market for REC mechanism. It was mentioned by the developers that wind sector has not yet reached to a stage to go for competitive bidding and, therefore, the route of Feed-in-tariff (FIT) should continue. Timely payment of electricity generated from wind projects is another necessity. A Payment Guarantee Fund was proposed. Signing of PPA is uncertain in some states. It was also suggested that renewables should be categorized under the “Priority Sector” by RBI.
The Minister, at the end, told that the issues and problems in wind sector will be looked by the Ministry and suitable actions will be taken. He said that the issue of restoration of AD benefit has been taken up by MNRE with Ministry of Finance. Regarding providing additional funding for GBI and other wind activities, he said that he will take it up with Ministry of Finance. However, depending upon the funds availability, needful will be done. He asked the MNRE officials to prepare the action points on the basis of today’s discussions. Shri Goyal asked IREDA to simplify the procedure for GBI releases and make it more transparent. Minister informed that a Global Investors Meet of all renewables will be organized in November, 2014 for which he suggested to have a committee comprising of stakeholders in renewable energy sector. The Minister also mentioned that he would like to interact with the stakeholders on quarterly basis.
Background:
Wind energy is the largest renewable energy option producing clean energy in India. A cumulative capacity of over 21,200 MW has been set up so far. A target of 15,000 MW has been kept for 12th Plan. Commercial wind power projects have been promoted by the Ministry since 1993-94 through a host of fiscal incentives which included Accelerated Depreciation (AD). The main driving force and the real incentive for development of wind sector has been the provision for Accelerated Depreciation, an incentive also available to many other sectors. This provision has enabled large profit making companies, small investors and captive users to participate in the sector. The AD benefit was withdrawn w.e.f 01.04.2012. This has resulted in sharp drop in wind power addition in last two years. A capacity of only 1700 MW in 2012-13 and 2079 MW in 2013-14 was installed as compared to 3097 MW in 2011-12 when AD was also available. This apart, due to high penetration of wind into grid, many infrastructural and regulatory issues have started affecting the sector.