The Ministry will recommend a mechanism to ensure timely payment of tariffs by State Electricity Boards to wind power generators, said Farooq Abdullah, Minister for New and Renewable Energy.
Wind energy is a key component of energy security and climate change mitigation. But the rapid gains in wind energy, which have put India among the global leaders, cannot be sustained if investors face a delay of more than a year in getting payments for energy supplied.
The payment security envisages the Centre paying power producers from the Clean Energy Fund and deducting the money from funds earmarked for the State concerned.
The MNRE has recommended that benefits such as Generation Based Incentive and Accelerated Depreciation be restored to the sector. Generation Based Incentive should be restored with effect from April 1, 2012, when it was phased out, he said.
Issue taken up with FinMin
MNRE has taken up the issue with the Finance Ministry, Abdullah said addressing Wind Power India 2012, a three-day conference and exhibition, where global leaders are discussing policy issues impacting the sector and showcasing products and technologies.
According to the Indian Wind Turbine Manufacturers Association, one of the organisers, the industry is hoping for a Generation Based Incentive of Re 0.80 a unit without any cap for 10 years. At the time the incentive was phased out the wind energy producers were getting Re 0.50 a unit with a cap of Rs 10.62 lakh.
Steve Sawyer, Secretary General, Global Wind Energy Council, also an organiser of the conference, said the focus of global wind energy investments had moved, from the West, to India, Brazil, Mexico and China which have registered the largest additions to capacity. But in the current year India has dropped out with the incentives being phased out.
Manufacturers’ woes
It will be tough for equipment manufacturers who have set up surplus production capacities totalling over 80 gigawatts globally against a demand estimated at half that capacity.
The new markets cannot make up for the West – the US last year set up 12 gigawatts of wind power and this dropped to 3-4 gigawatts this year. It will be tough for manufacturers in the coming years with large players alone coping, he said.
Wind tariffs are coming down, in parts of India dependent on imported coal for power generation, it is cheaper than thermal power. It is good for wind power generators and consumers, Sawyer said.
Ramesh Kymal, Chairman, Turbine Manufacturers Association, said wind energy capacity addition in India dropped to 850 MW in the current year up to September against 1,400 MW last year.
The Government has targeted addition of 8,000 MW yearly as a part of its action plan on climate change. Under the present policy environment not even one-fourth of the target can be achieved, he said.