Wind energy industry demands restoration of accelerated depreciation

Industry players feel that restoration of accelerated depreciation for wind energy project will help the industry to grow India is one of the leading wind energy markets in the world and provides good business opportunities for domestic and foreign players. Diverse incentives supported by a long term policy and regulatory framework at the central and state levels have played a crucial role in achieving this goal. India has cumulative installed capacity of 19051.5 MW as on January 2013. The Accelerated Depreciation (AD) has been an important driving force in wind power development in the country so far. A large number of wind power projects in the country have availed the AD benefit. The government has withdrawn AD incentive for wind power projects since April 2012. According to Indian Wind Power Association, withdrawal of AD has caused loss of revenue, capacity addition and has affected the micro, small and medium enterprises, which tapped wind energy as a clean and prime source to meet their requirements.Restoration of AD is in demandWhile talking about need of restoration of AD for wind energy projects, Rakesh Bhatia, VP, Renewable Energy, DPSC, said, “India is short of power. Coal and gas is in short supply and other issues are holding installation of thermal power plants. Under the present situation, renewable energy is the only solution and therefore to meet energy requirement it is necessary to encourage renewable energy. The capital cost per MW of wind power plant is high, present bank finance rates are also high. Investors need government support to sustain the investment. AD to some extent compensate for the differential expenditure.”On other hand, Narasimhan Santhanam, Director, Energy Alternatives India, said, “In Indian Wind Turbine Manufacturers Association (IWTMA)’s opinion the AD will bring the traditional investors to invest more in wind power industries that are keen to derive indirect financial benefits. These industries have indeed been the drivers so far for this industry’s growth.” AD benefit is available for a whole range of renewable energy investments, including coal power plants. “Why discriminate against wind power alone?” asked Mr Santhanam. “AD benefit will definitely spur investments from the non-IPP segment, which has currently gone down significantly resulting in the lackluster growth of the wind power sector in terms of capacity addition in last 18-months,” he adds.

 
Investment in renewable energy has gone down significantly in FY 2012-13. Government needs to declare AD and generation based incentive (GBI) on priority.- Rakesh Bhatia, VP, Renewable Energy, DPSC

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