Incentive for wind power needs to be revisited
The reluctance of distribution companies (Discoms) to procure wind energy due to their weak financial health is one of the biggest challenges facing the wind energy sector and there is now a need to shift from Generation-Based Incentives (GBI) to Procurement-Based Incentives (PBI) in the country, according to an evaluation of the GBI scheme done by CRISIL. The GBI scheme was introduced by the Ministry of New and Renewable Energy (MNRE) in December 2009 to provide a “level playing field to Independent Power Producers (IPPs), and to promote increased generation and efficiency in installation,” according to the report by CRISIL. Under the second phase of the scheme, the GBI provided to wind power producers is Re. 0.50 per unit of electricity that is fed into the grid, for a period of four years, and a maximum of 10 years. The GBI has a cap of Rs. 1 crore per MW. While India ranks fourth behind China, the US and Germany in terms of total installed wind power capacity, within India, Tamil Nadu had the highest installed capacity at 7,686 MW out of a gross estimated potential of 33,800 MW, followed by Rajasthan, Madhya Pradesh and Maharashtra. “The overall objective behind the GBI scheme, i.e., providing incentive equivalent to that of AD, and thus to provide a level playing field between various classes of investors, has been appreciated. This gets reflected in the fact that the GBI scheme has been helpful in securing investments from IPPs and FDIs to the tune of 7,993 MW out of total new installed capacity addition of 14,939 MW – close to 54 per cent. This has resulted in increasing the share of GBI-based projects to about 30 per cent of total wind installed capacity in India,” CRISIL observed.
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