CleanTech/ Renewable Energy, Finance, Other, Wind

Ministry moots policy changes to boost investment in wind energy

According to reports, the Union Ministry for New and Renewable Energy has suggested certain policy changes to boost investment in the wind energy sector.

The Ministry wants to reintroduce ‘accelerated depreciation mechanism’ which had earlier helped grow the wind energy industry.

“The Ministry has recommended a few checks and balances to the accelerated depreciation mechanism. Currently the proposal is before the Finance Ministry for its evaluation,” Alok Srivastava, Joint Secretary in the Ministry, told Business Line.

“The Finance and Revenue Ministry raised objections for its extension. Now we have given our opinion and suggested a few changes for reintroduction. Once we get clearance, it is likely to go before the Cabinet for final approval,” he added.

The introduction of accelerated depreciation mechanism saw the country producing about 18,000 MW of wind energy. The mechanism expired on March 31, 2012 and was not extended.

In addition to incentives for wind energy projects, the Ministry is also focusing on grid connectivity for smooth evacuation of power.

“Currently wind power projects are located in resource-rich pockets in South India, but are isolated. Now work is on to connect them with the national grid, which is likely by 2014,” Srivastava said.

“Tamil Nadu has set up 7,100 MW of wind energy, but is unable to evacuate to other regions in the absence of grid connectivity,” he added.

The Ministry is also working on a mechanism to install wind energy projects in non-ecological zones. “There is opportunity for State nodal agencies to identify high wind potential wasteland/scrub forest lands and expedite clearances for them,” Srivastava said.

Praising Karnataka for taking the lead, he said, “The State has been able to attract sizable investment at the global investment meet last year.”

He also pointed out that a sub-committee of the energy department has submitted its final report on offshore wind energy policy. “The sub-committee headed by the TNEB Chairman has recommended setting up a single-window mechanism. It also wants to help investors to identify locations for setting up wind farms,” he said.

For setting up offshore wind energy farm, at present investors need clearances from 18 departments such as coastal security, defence, department of space, petroleum and earth sciences.

Offshore wind energy potential is huge in the coastal States of Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka, he added.

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