Indian Government Revives Wind Market with Renewed Incentives

The Indian government has brought back a key wind industry incentive in today’s budget, following intense lobbying from the industry. The industry has been lobbying for the reintroduction of the generation-based incentive (GBI) since it was withdrawn last April. It paid wind generators INR 0.5/KWh (EUR 0.007/kWh). The government has not yet announced the new rate.

Indian finance minister P Chidambaram also announced low interest loans for wind energy. The money will come from the National Clean Energy Fund, which funds projects and research into the clean technology sector.

“I am confident that the industry will bounce back by 2014-15 and may be able to cross the target of 5,000MW capacity every year,” said Ramesh Kymal, chair of the Indian Wind Turbine Manufacturers Association.

However, the government was silent on the issue of accelerated depreciation (AD), the country’s other main incentive for wind. This was also withdrawn last April. The industry is hoping its fate will be revealed along with the details of how the GBI program will work.

The withdrawal of both the GBI and AD resulted in a drop in new installations of wind, with only 1.07GW added from April to December last year, compared with the 3.1GW achieved for the same period a year earlier.