 "Wind energy sector faces tough times as sops scaled down")
Wind power companies are headed for tough times as the key incentives enjoyed by the sector are being scaled down.
For one, the Budget had cut down the upper limit of accelerated depreciation (AD, a tax benefit scheme for the wind power sector under which part of the project cost is paid back) from 80 per cent to 40 per cent with effect from April 1, 2017.
Another benefit enjoyed by the wind power sector, generation-based incentive (GBI), will also cease to exist from March 31, 2017. Under GBI, wind power units will receive 50 paise for every unit of power produced.
"This financial year, wind power producers will stretch to add around 4,500 Mw somehow. This is the last year for any incentive scheme available for wind power. For the coming years, there is no clarity," said a senior wind energy executive.
According to him, there will be no incentives for the sector in FY18, something which has investors worried. "Like it happened in 2012-13 when the annual capacity addition fell by half owing to lack of incentives, the same is feared for the next financial year."
Of the 25,188 Mw of wind power in the country, around 70 per cent is built on AD. The remaining are independent power projects, which avail of the GBI benefit. The sunset date of GBI is March 2017. In 2012, when the wind sector was without any financial assistance, capacity addition fell to 1,700 Mw - half of what was added in the year before. During 2013-14, it managed to touch 1,950 Mw. In the current year, wind power has touched 1,700 MW out of the target 2,400 Mw.
India is the fifth largest wind power producer in the world. According to experts, stagnation looms over the sector as investors are shying away. "Even Suzlon, the largest investor in wind energy, is now focusing on solar power. Smaller players are just selling off their wind assets," said one. Nearly 500 Mw of wind power projects are in the market for resale or equity hunting.
| Year | capacity added | installed capacity |
| 2010-2011 | 2349.4 | 14052.47 |
| 2011-2012 | 3216.55 | 17269.02 |
| 2012-2013 | 1740.7 | 19009.72 |
| 2013-2014 | 2094.7 | 21104.42 |
| 2014-15 | 2311.7 | 23416.12 |
| 2015-16* | 1773.68 | 25217.29 |
| * as on February 2016 | ||
| Source: Indian Wind Turbine Manufacturer's Association (IWTMA) | ||
