Industry seeks restoration of incentives for wind energy sector
Updated: Jul 02, 2014 01:09:59pm
New Delhi, Jul 2 (KNN) In a move which will give relief to the stakeholders in the wind sector, the Ministry of New and Renewable Energy (MNRE) has taken up the issue of accelerated depreciation (AD), an incentive given to investors which would also contribute to reducing cost of production among Indian SMEs, with the finance ministry.
Accelerated depreciation-which allowed the investing company 80 per cent depreciation for computing taxable profits in the first year of buying wind turbines, was abolished on April 1, 2011 by the Government, causing a dip in the 12th Plan.
Power and Coal Minister, Piyush Goyal has said that he would discuss the issue of providing additional funding for generation based incentive (GBI) and wind activities with the finance ministry.
Goyal yesterday held an interactive meeting with all the stakeholders in the wind sector. The representatives from four wind associations - Indian Wind Turbine Manufacturers Association (IWTMA), Wind Independent Power Producers Association (WIPPA), Indian Wind Energy Association (InWEA) and Indian Wind Power Association (IWPA) were called for discussions. The officers from MNRE, IREDA and C-WET were also present.
The industry emphasized that AD benefit is not a loss to government; rather it is a deferment of income tax. In addition, government loses other taxes like MAT, service tax, central sales tax etc in a situation of no investment because of absence of AD.
Therefore AD benefit should be restored, the industry demanded.
The industry also sought an increase in funding for Generation Based Incentive (GBI) as there are pending claims of GBI of the order of Rs 300 crore.
The other major issue discussed in the meeting were augmentation of transmission and evacuation facilities by the state government.
There was a loss of around 2.1 billion units in Tami Nadu alone during windy season (May-August) last year on account of putting the wind turbines off-grid.
The industry emphasised the need to enforce renewable purchase obligation (RPO). This will create the market for REC mechanism. It was mentioned by the developers that the wind sector has not yet reached the stage to go for competitive bidding and, therefore, the route of feed-in-tariff (FIT) should continue.
Timely payment of electricity generated from wind projects is another necessity. A payment guarantee fund was proposed. Signing of PPA is uncertain in some states. It was also suggested that renewables should be categorised under the “priority sector” by RBI.
Wind energy is the largest renewable energy option producing clean energy in India. A cumulative capacity of over 21,200 Mw has been set up so far. A target of 15,000 Mw has been kept for the 12th Plan. The main driving force and the real incentive for development of wind sector has been the provision for AD, an incentive also available to many other sectors. (KNN/SD)
Accelerated depreciation-which allowed the investing company 80 per cent depreciation for computing taxable profits in the first year of buying wind turbines, was abolished on April 1, 2011 by the Government, causing a dip in the 12th Plan.
Power and Coal Minister, Piyush Goyal has said that he would discuss the issue of providing additional funding for generation based incentive (GBI) and wind activities with the finance ministry.
Goyal yesterday held an interactive meeting with all the stakeholders in the wind sector. The representatives from four wind associations - Indian Wind Turbine Manufacturers Association (IWTMA), Wind Independent Power Producers Association (WIPPA), Indian Wind Energy Association (InWEA) and Indian Wind Power Association (IWPA) were called for discussions. The officers from MNRE, IREDA and C-WET were also present.
The industry emphasized that AD benefit is not a loss to government; rather it is a deferment of income tax. In addition, government loses other taxes like MAT, service tax, central sales tax etc in a situation of no investment because of absence of AD.
Therefore AD benefit should be restored, the industry demanded.
The industry also sought an increase in funding for Generation Based Incentive (GBI) as there are pending claims of GBI of the order of Rs 300 crore.
The other major issue discussed in the meeting were augmentation of transmission and evacuation facilities by the state government.
There was a loss of around 2.1 billion units in Tami Nadu alone during windy season (May-August) last year on account of putting the wind turbines off-grid.
The industry emphasised the need to enforce renewable purchase obligation (RPO). This will create the market for REC mechanism. It was mentioned by the developers that the wind sector has not yet reached the stage to go for competitive bidding and, therefore, the route of feed-in-tariff (FIT) should continue.
Timely payment of electricity generated from wind projects is another necessity. A payment guarantee fund was proposed. Signing of PPA is uncertain in some states. It was also suggested that renewables should be categorised under the “priority sector” by RBI.
Wind energy is the largest renewable energy option producing clean energy in India. A cumulative capacity of over 21,200 Mw has been set up so far. A target of 15,000 Mw has been kept for the 12th Plan. The main driving force and the real incentive for development of wind sector has been the provision for AD, an incentive also available to many other sectors. (KNN/SD)
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