According to report by Deloitte, the renewable energy sector in India will be facing sluggish growth. Wind energy in particular could suffer because of the removal of twin benefits that proved to serve as a catalyst for the sector.
Wind power producers, climate group of MP’s and the Indian Wind Power Association (IWPA) have all requested the government to consider reintroducing the benefits for the sector.
The move may see reintroduction of accelerated depreciation benefits and generation-based incentives (GBIs) that were withdrawn in April last year. Under the scheme, investors enjoyed benefit of up to 80 per cent of the project cost for devices like wind mills and solar cookers. Under GBI, an incentive of 50 paise was provided for every unit of electricity generated.
The state of Gujarat recently surprised solar power developers with the Gujarat Urja Vikas Nigam Ltd, which submitted a petition this month and requested a 28 percent cut in the rate it pays for electricity from solar plants has been strongly opposed by solar developers. The electricity regulator is expected to give a ruling on the issue soon.
Leading consultancy firm Deloitte, in its report, has said that global investments in renewable energy sector will continue to decline in the short term. Deloitte India’s senior director Debasish Mishra said, “This was due to lack of implementation of Renewable Purchase Obligation [RPO] by the distribution utilities and designated consumers. There is a slowdown particularly in the wind sector…”
However, the report noted that the prospects for global renewable energy industry would be attractive in the long term.
Renewable energy sector is expected to draw in big investments in the near future but scams and confusion regarding incentive schemes has dampened industrial interest in the sector.