wind

Feed-in tariff for Indian wind

The Indian Government has announced the introduction of an obligatory feed-in tariff to be paid for wind energy that generators feed in to the country’s grid. The feed-in tariff makes this market, which already amounts to 11 GW of installed capacity, even more attractive. The Asian sub-continent is currently fifth in the world wind league behind the US, Germany, Spain and China.

Wind energy has been the fastest growing renewable energy source in India with a cumulative capacity of around 11,000 MW already in place.

In order to increase the investor base, India’s Ministry of New and Renewable Energy has announced a scheme for Generation Based Incentives of 0.50 Rs ($0.01) )per kWh of electricity fed into the grid from wind power projects, which will be implemented by the Indian Renewable Energy Development Agency (IREDA).

The GBI will be over and above the tariff fixed by the State Regulatory Commissions for purchase of electricity from wind power projects. The total price (market price plus GBI) will be limited to a maximum of Rs. 62 per MW, which represents a considerable increase in the rate established for wind power to date.

The Indian Government has already initiated several measures to enable India to become a global leader in renewable energy, particularly in wind sector. These include the package of fiscal and financial incentives including concessions such as 80% accelerated depreciation, concessional custom duty, excise duty exemption, sales tax exemption, income tax exemption for 10 years, etc.

According to the Ministry of New and Renewable Energy, the accelerated depreciation benefit will run simultaneously, till the end of 11th plan period or introduction of proposed Direct Tax Code, whichever is earlier, in a mutually exclusive manner. The benefit would also be available for captive wind power projects but not for third-party sale.

The Minister of New and Renewable Energy, Dr Farooq Abdullah, has stated that the new feed-in tariff “will bring greater security to investors and ensure long-term cash flow and returns”. The Government forecasts that the GBI will cover an estimated 4 GW during the remaining period of the 11th Plan for renewables of the Indian Government, taking wind power development in the country to new heights.

According to the Minister, with the availability of better and efficient wind turbines suitable for India’s moderate wind regimes and increased infrastructure for power evacuation, “the wind power potential of the country, presently estimated to be over 45,000 MW, could go up”.

For additional information:

Indian Ministry of New and Renewable Energy 

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