FISME seeks restoration of incentive for wind energy projects

The Federation of Indian Micro, Small and Medium Enterprises (FISME) and the Indian Wind Power Association have demanded immediate restoration of Accelerated Depreciation (AD) for wind energy projects, which was withdrawn two years ago. Wind energy provided a dependable and clean alternate source in many states such as Tamil Nadu, Andhra Pradesh and Odisha.

The AD incentive had led a large number of private sector companies to commit investments in wind power. The AD, which allowed the investing company 80 per cent depreciation while computing taxable profits in the first year of buying wind turbines, was abolished on April 1, 2011 by the government, causing a dip in investments after the start of the Twelfth Plan.

The chairman of the Indian Wind Power Association, K Kasturirangan said that withdrawal of AD has led to significant loss of capacity addition, revenue loss and adversely affected MSMEs, which tapped wind energy as a clean source to meet their requirements.

Mukesh Kalra, an official of FISME, said, "The needs of 26 million SMEs in India cannot be met by any one source of energy alone. Thermal, nuclear and hydro energy cannot adequately meet the requirements of the industry; hence there should be a renewable, pollution-free, long-term and cheaper source of energy to make SMEs more competent and energy-efficient."

Kasturirangan said Tamil Nadu faces four-to-six hours of power cuts during peak hours and a total of about 12 hours of power cuts daily, except in Chennai. "The power generated through wind energy, which is the most affordable form of renewable energy, is not sufficient to meet the demand of industries like textiles, foundries, etc. So, the withdrawal of the scheme is keeping the investors away from putting their money into wind power projects," he said.

He added that 40 per cent of the total wind energy produced in the country was from Tamil Nadu. FISME quoted CRISIL as saying, "The withdrawal of AD has caused net loss to the government. The government is losing on its GDP, employment and exports due to the power problem faced by the small industry."

A report of the Indian Renewable Energy Development Agency has said the wind energy sector currently has a negligible level of non-performing assets, indicating wind energy projects are generating enough electricity to service their respective debts and maintaining overall viability, according to FISME.