Wind Energy Sector in India : Overview, Benefits & Incentives for Windmill Power Projects in India

What a dramatic turn of events the Indian politics is witnessing & would witness in the coming 2014 elections bringing Indian politics at the “Inflection Point” ! Well, Renewable arena in India is also experiencing the same situation especially Wind and Solar Energy Sector in India.

Talking about Wind energy in India, all started well with wind since around 2002 till about end of 2011 as it enjoyed the benefits of Accelerated depreciation (AD) till April 2012. Also Generation Based Incentive (GBI), announced in 2011 was discontinued in 2012, only to be reintroduced in 2013 in the union budget.

Now the Government is also planning to launch its first wind energy mission this year to give a boost to the wind energy sector and putting it in the same league as the high-profile solar mission. The ‘National Wind Energy Mission (NWEM)’, might be launched around the middle of the year. This might provide a great boost to wind energy sector which is experiencing slowdown since 2011 continually.

Current Wind Energy / Wind Power Scenario in India :

India is the fifth largest wind power producer in the world with an installed capacity of close to 20 GW ! So far approximately 29,536 MW of renewable power capacity have been installed in India, which includes about 19,933 MW from wind, 2079 MW from solar, 3746 MW from small hydro and 3776 MW from bio energy.

The graph below, shows the  year wise installation of wind energy in India since 2002 till now :

 

Also shown below is targets and achievements of power generation through Wind Power during last 3 years and current year (till 31.10.2013) : 

 

BENEFITS & INCENTIVES TO WIND ENERGY PROJECTS IN INDIA :

There are various fiscal benefits & incentives which the Wind Energy Sector enjoys :

Central Fiscal Incentives from Ministry of Finance
Direct Taxes : Wind power projects shall have normal depreciation of 15%. In addition there is a provision of availing 20 % depreciation in the first year. Exemption on Income Tax on earnings from the Project u/sec 80IA for 10 years.	Indirect Taxes : Exemption of Excise Duty on Wind Energy Generator (WEG). Concessional Custom Duty on specified WEG components

Apart from the above tax benefits the Government & Ministry of New & Renewable Energy  (MNRE) has also introduced the benefits of Generation Based Incentive (GBI). Some of the important  features of the GBI Scheme are :

• Companies shall be allowed to avail either AD or GBI but not both.
• A GBI will be provided to wind electricity producers @ Re. 0.50 per unit of electricity fed into the grid for a period not less than 4 years and a maximum period of 10 years with a cap of Rs. 100 Lakhs per MW.
• The total disbursement in a year will not exceed one fourth of the maximum limit of the incentive i.e. Rs. 25.00 Lakhs per MW during first four years. The GBI scheme will be  applicable for entire 12th plan period having a target of 15,000 MW
• GBI would be available for wind turbines commissioned on or after 01.04.2012
• All wind power producers wishing to avail Generation Based  Incentive (GBI) are required to registered with IREDA. The incentive is over and above the tariff that may be approved by the State Electricity Regulatory Commissions (SERC’s) in various states.
• GBI would not be available to any wind power project selling power to third party, (viz. merchant power plants)

STATE-WISE WIND ENERGY TARIFFS IN INDIA :

Attached below is the chart of wind energy / power Feed-In-Tariffs across various states in India :

 

Author urvishdave.wordpress