Asia Report: India Slashes Wind Incentive

Renewable Energy World Editors
April 02, 2012 | 3 Comments

India has drastically scaled back tax incentives for wind generation in a move that many fear will halt new wind energy investment while derailing the manufacturing base that has grown up to support that growth.

It’s a scenario that in many ways resembles the turbulence being felt in the American wind industry, which is facing an end to its tax incentive at the end of 2012.

According to Bloomberg, a tax break that allowed projects to claim an accelerated depreciation at 80 percent of the cost of equipment expired on March 31, and that incentive has been dropped to 15 percent. Demand for turbines may drop by nearly 400 megawatts because of the planned cut, Bloomberg New Energy Finance said in July.

The tax break is credited with driving 70 percent of the nation’s installations in the last fiscal year.

The end of the generous tax break came just as a report surfaced that found that the nation’s wind energy potential is up to 30 times greater than the previous generally accepted assessment.

SOLAR IN INDIA

India’s Newest 40 MW Solar Farm Commissioned: In what can be termed as a major leap toward solar power generation in western Rajasthan, the country's largest solar power plant with an installed capacity of 40 MW started producing electricity over the weekend.

India’s Solar Excitement: Proceed With Caution: With its population already more than 1.2 billion and on track to surpass China by 2030, India is in dire need of energy. Though the government set an initiative to power the entire country by March 2012, nearly 300 million are still living without electricity. A look at how India is aiming to solve this, in part, by building solar farms.

Order In for CSP Plant in India: Siemens Energy has been awarded an order for the Megha parabolic trough concentrating solar thermal power plant to be built in Andhra Pradesh, near Hyderabad, India.

JAPAN’s FIT

Prepping for a FiT in Japan: Solar Frontier and Japan Asia Group have signed a solar energy project promotion memorandum of understanding to accelerate photovoltaic projects in Japan with anticipation of a new feed-in tariff.

Could FiT Spark A Boom: Japan's 10 regional power companies drew up plans in 2008 to build a total of 22 large solar plants with capacity of 102.3 megawatts to help the world's fifth-biggest emitter cut greenhouse gas emissions while ensuring energy security. Their plans could be followed by dozens more large solar projects by non-utility companies if the pricing for the scheme is as lucrative as what Japan Photovoltaic Energy Association has proposed of 42 yen ($0.5) per kilowatt hour for 20 years. A panel of experts started a debate on the pricing last month and is expected to finalise a report to Trade Minister Yukio Edano in May at the earliest.

IN THE NEWS

Opening A Wind Farm Corridor: China is seeking to develop the Hexi Corridor, part of the ancient Northern Silk Road that lies inside China, into a demonstration zone for renewable energy in a move to lessen its dependence on foreign oil and gas.

China’s Inverter Market: Thanks largely to China's national feed-in tariff (FiT) implemented last summer, the domestic market for PV inverters quintupled in 2011 to surpass 2.5 gigawatts (GW) of shipments, some 2.4 GW of actual installations, and $300 million in revenues, says IMS Research.

Biodiesel Test Run in India: Extract of the slimy green algae found in abundance across India's 7,517 km coastline is all set to fuel vehicles. This week, the country will witness the first test run of vehicle running on a 100 percent marine microalgal biodiesel in New Delhi.

Floating Wind Farm Planned in Japan: Japan is preparing to bolt turbines onto barges and build the world’s largest commercial power plant using floating windmills, tackling the engineering challenges of an unproven technology to cut its reliance on atomic energy. Marubeni Corp., Mitsubishi Heavy Industries Ltd. and Nippon Steel Corp. are among developers erecting a 16-megawatt pilot plant off the coast of Fukushima, site of the nuclear accident that pushed the government to pursue cleaner energy.

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3 Comments

Bob Pandya
April 4, 2012

It is good and bad for wind industry stalwarts to lose incentives. Our Govt. at State and Federal level does things w/o due consideration and adequate alternative. I like what is proposed by Dr. Jagdeesh but he need to convince the politicians. Most importantly, the tax incentives should be not a blank check but on generation bases. But what about small wind turbine manufacturer? They should be given more incentives and encouraged like what has been done in China. Small wind turbines will create more jobs and small scale industry than the large ones.As per reports, 300 million people in India have no or very little electricity. Has any one come up with idea how to provide them electricity? No. Because we are doing things for big cities and think of big plants. No body thinks of villages. W/O gramin developemnt, no prosperity will be viable to those deprived.Give incentives for small wind and solar PV to individuals and manufacturer. You will save lacs of carores in tranmission lines and loses due to that.Electrify villages by self sustaiment and not with big grid lines.MNRE should look in to it seriously and come up with supporting policies.

Thanks,

Bob Pandya
bchandrasom@yahoo.com

Ravindra Kshirsagar
April 4, 2012

I am agree with Mr. Dr.A.Jagadeesh and supports new development concept introduce by him in wind sector of India.
It is good thing to involve farmers in wind project.

Ravindra Kshirsagar
Satara Maharashtra.

ravindrabkshir@rediffmail.com

Anumakonda Jagadeesh
April 3, 2012

It is a common feature in many countries to extend incentives to Renewables only for limited period until the Renewable Energy field (For example wind) is established. After all Depreciation benefits whether it is 100 per cent or 80 per cent is public money!

It is true that there were many instances of the Tax benefits either by users as well as industry. Right from the Beginning the Government (MNRE) should have enacted generation-based incentives. September 30 and March 31 are the important dates for those in the Wind Energy field to grab Depreciation and other benefits.

I have had been advocating People's participation in Wind Farms in India like the one in Denmark, Wind Farm Co-operatives. A 'Renewable energy Fund' can be created and investments in this by those pay tax can be exempted under Section 80 C.

Also one doubts about the cost of Wind Turbines. While the cost of Solar PV is coming down as time advances, why Wind Turbine Prices are constant? At least this withdrawal of Tax benefits will force the Wind Industry to bring down the prices in order to survive.

Another important factor is thorough study on OFF SHORE WIND FARMS in India. As Power is cube of Velocity, any good wind site will make all the difference between a wind project success or failure.

Another important factor is retrofitting of old wind turbines of lower capacity installed long back with higher capacity wind turbines in Windy places like Muppandal.

Dr.A.Jagadeesh Nellore(AP),India
Wind Energy Expert
E-mail: anumakonda.jagadeesh@gmail.com

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