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:
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since it brings back much needed (& lobbied for) subsidy benefits to the Wind sector which did slow down after it was repealed around one and half years back.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:
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