Budget 2013: Wind energy sector gets breather with return of incentives

Chennai: Union Finance Minister P Chidambaram’s budget on Thursday sought to breathe life into the wind power sector with reintroduction of generation based incentive (GBI) while disappointing the industry by being silent on the accelerated depreciation scheme. Welcoming the reintroduction of GBI, industry players said there is no clarity on how the scheme will be rolled out.  Presenting the union budget for 2013-14 in the parliament, Chidambaram said: “The non-conventional wind energy sector deserves incentives. Hence, I propose to reintroduce generation-based incentive for wind energy projects and provide Rs. 800 crore to the ministry of non renewable energy for the purpose.” Wind power producers were given an incentive of 50 paise per unit generated subject to a cap of Rs. 62.5 lakh per MW of installed capacity. The scheme ended March 31, 2012. Similarly the government also scrapped the accelerated depreciation for the wind turbines last year. The scrapping of the two schemes resulted in a drastic fall in demand for wind turbines across the country. Reacting to Chidambaram’s announcement, Sunil Jain, CEO and executive director at Hero Future Energy, told IANS: “Whether the scheme is applicable with retrospective or prospective effect is unclear. It should be applicable for machines installed during current fiscal which is the first year of the 12th Plan period.” According to him, the GBI should not be restricted for the next fiscal alone. Jain also welcomed the government’s move to provide low interest bearing funds from the National Clean Energy Fund to Indian Renewable Energy Development Agency Ltd (IREDA) to lend to renewable power project developers. Declaring clean and green energy as government’s priority, Chidambaram also said a scheme to encourage cities and municipalities to take up waste-to-energy projects in public-private-partnership (PPP) mode which would be neutral to different technologies would be evolved. “I propose to support municipalities that will implement waste-to-energy projects through different instruments such as viability gap funding, repayable grant and low cost capital,” Chidambaram added. IANS