Since the beginning of the current financial year, the wind power industry has had much to despair about. With the removal of both ‘accelerated depreciation’ and ‘generation-based incentive,’ (GBI) the interest level among the investors to put up wind power projects waned considerably. As a result, the country added only 851 MW of wind power capacity in the first six months of the current year, compared with 1,402 MW in the corresponding period last year.
The tepidity is because of more than the absence of GBI, the uncertainty regarding the coming back of the incentive, no investor would want to look like a fool by having rushed into a machine installation and find that if only he had waited a little longer he would have been eligible for an incentive valid for the next, say, 20 years.
The GBI has been promised by the Ministry of New and Renewable Energy in various forums and there is a great expectation about it. Investments into the wind sector are hanging fire as the industry is waiting in watch for the GBI re-instatement.
Be that as it may, a very recent development has brought fresh cheer to the industry — the possibility of re-instatement of the other benefit — accelerated depreciation.
This is said to be due to the efforts of the Indian Wind Power Association. The Association’s Chairman, K. Kasturirangan, met the Union Finance Minister, P. Chidambaram, a few days back in Coimbatore, to follow up on his own previous presentation to the Ministry of Finance.
In that presentation, Kasturirangan endeavoured to make the case the ‘accelerated depreciation’ is only a revenue deferral, and not sacrifice to the Government.
“I am confident that the Government will bring back AD,” Kasturirangan told Business Line .
The Indian Wind Power Association has 1,500 members.
Dr K. Venkatachalam, Chief Advisor, Tamil Nadu Spinning Mills Association (TASMA), fully shares Kasturirangan’s optimism.
Recently, when asked if TASMA’s members would look at solar power projects with accelerated depreciation in mind, he said he was confident that AD would be given for wind projects also.