14

August

1

Generation Based Incentive for Wind Power being reinstated by Government of India

by Harsha Yadav

In the budget of 2013-14, Finance Minister P. Chidambaram had promised reinstating the Generation Based Incentive program for Wind Energy in India. The resolution to that effect has been finally passed by the cabinet which met on August 1st.

The quick summary of the resolution that has been passed and the benefits to wind industry:

  1. Generation Based Incentive (GBI) of 50 paise per kWh (unit) generated by Wind Power.
  2. The GBI will be given till a maximum of Rs. 1 crore per MW. That means 20 million units of energy per MW can claim GBI during the entire lifetime of the wind turbine.
  3. The claim period for the GBI is between 4 years to 11 years. ie., the developer can claim the entire GBI money of Rs. 1 crore in not less than 4 years and not more than 11 years.
  4. The GBI subsidy can be availed with retrospective effect.
  5. No confirmation has been provided on reinstating the Accelerated Depreciation.

This ruling is significant since it  brings back much needed (& lobbied for) subsidy benefits to the Wind sector which did slow down after it was repealed around one and half years back. Reports say that there are projects worth more than 470 MW that are not progressing forward due to lack of PPAs and clarity from the government incentives. With this policy directive, roughly 1 crore of GBI on an average capital cost investment of 5 – 6 crs/MW provides a clear incentive of 15-20% or even higher for the developer.

Would this translate to a flurry of new project activity to claim this benefit quickly, we will get to know in the next 2-3 months.

Read more reports on this front here:

http://www.thehindubusinessline.com/industry-and-economy/cabinet-clears-generationbased-incentive-for-wind-power-projects/article5019072.ece

http://www.livemint.com/Industry/HzQ1NGtt9kX7MqsJcJPcmO/India-seeks-to-revive-interest-in-wind-sector.html

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/generation-based-sops-announced-for-struggling-wind-power-sector/articleshow/21812402.cms

One thought on “Generation Based Incentive for Wind Power being reinstated by Government of India

  1. Ashish A Mithani

    Every step forward is welcome. Without challanging the incentives enjoyed by the conventional players – the plight of renewable sector is finally heard. better late than never.

    Every step in indegenizing power and reducing imports is welcome.

    Each initiative to harness the wind today will be a boon tomorrow. As known & well-known – FUTURE WILL THANK YOU, THE HON’BLE GOVT OF INDIA.

    Reply

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