WHAT INDIA WIND NEEDS

Wind energy dropped 1,500 MW due to withdrawal of incentives; Association asks govt to restore generation-based incentives and accelerated depreciation for the industry

May 16, 2013 (Press Trust of India via Business Standard)

“…Indian Wind Power Association (IWPA)…asked the government to restore generation-based incentives and accelerated depreciation for the industry, which witnessed a dip of 1,500 MW in generation during 2012-13…Wind energy is the cheapest source of electricity in the country. The current installed capacity is 19,000 MW.

“…[The dip followed] removal of…accelerated depreciation (AD)…[which] is based on investment. If a company invests Rs 100 then Rs 80 it can take back as tax incentive. Under the scheme for wind power, a GBI (Generation Based Incentive) of 50 paise per unit of electricity fed into the grid is provided for a period not less than 4 years and a maximum period of 10 years…’

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“…AD provides cheaper and non-polluting electricity with no annual escalations…[R]einstatement of GBI has been announced during the Budget 2013-14. Its form and structure is yet to be announced.

“According to various reports these incentives were scrapped as many developers took incentives to save tax and after the completion of incentives either neglected or abandoned the wind farms altogether.”

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