Wind power set for boost

The Central government is planning to make the depreciation claims available for investments made in wind turbines tradeable.

According to officials, the move can attract more investments in the wind energy sector.

V Subramanian, secretary to the ministry of non-conventional energy sources (MNES), said on Tuesday the idea is being discussed by the ministries of finance and revenues and a decision will hopefully be made before the presentation of Union Budget 2007.

"At present, individuals are forming companies only to invest in wind turbines and they have no other major heads of income against which to offset the sizeable depreciation they can claim," Subramanian said.

If the depreciation entitlement is made tradeable, more investors will come into the sector, he said.

Subramanian said the present system of allowing 80 per cent depreciation for wind energy investments will then be withdrawn and the investor would instead get tax credit for units of power generated and supplied.

These tax credits would then be recorded in the form of some certificates so that they can be sold and bought on the lines of equity shares or other financial instruments, he explained.

"A mechanism will have to be set up to keep the records of all entitlements and deals in them," Subramanian said, adding the initial work of acting as custodian may be assigned to Indian Renewable Energy Development Authority or a few select public sector banks.

Earlier, speaking as the chief guest at the inaugural function of the first Wind India 2006 conference hosted by World Institute for Sustainable Energy, Subramanian said wind energy sector has a significant role to play in the time of depleting natural resources and ever increasing demand for power.

There is a need to identify and develop technology to make turbines that will run on low intensity winds and the MNES will support such efforts for research, he said.

Subramanian said domestic manufacturers of wind energy equipment can supply turbine components to global firms. The local firms can take advantage of the SEZ schemes announced by the government, he added.