It seems that the Indian Government is considering to revive the domestic wind energy market by reintroducing tax and fiscal incentives (Accelerated Depreciation and Generation Based Incentive) which were removed during the last year.
According to the Indian Wind Power Association (IWPA), the removal of above incentives have caused a fall of atleast 1,500 MW installations of wind project during the financial year 2012-13.
Accelerated Depreciation Benefits are the tax benefits which significantly reduces the tax liabilities of the Project Developer; Generation Based Incentive (GBI) is fiscal benefits which increases the revenue stream of the Project by giving additional revenue per unit which is over and above the tariff.
Ministry of New and Renewable Energy (MNRE) has prepared a draft paper for this and circulated to various ministries to get their opinion. It seems that the Ministry of Finance has agreed and moved the note ahead.
According to the audit and consulting firm Ernest & Young’s Renewable Energy Country Attractiveness Index released on 22 June 2013, which covers all forms of renewable energy India’s ranking slipped from the fourth position (April-June last fiscal) to eighth position in the last quarter.
However, according to some of the experts, the withdrawal of incentives has helped the wind business in some way to streamline the business. As the Accelerated Depreciation has been vanished, which has removed the retail market of wind projects and more emphasis was given to the Independent Power Producers (IPPS) which fare committed to set up quality projects.
So far, India has an installed power generation capacity of around 2,25,133 MW out of which as high as 12.2% or 27, 542 MW is of Renewable Energy including 19,618 MW of Wind Projects.
According to the industry experts, the official communication for the renewal of incentives is expected to come by end of this month.
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