Indian Wind Sector Slows

Wind power firms slowed capacity addition for the first time in 20 years as the government stalled on announcing a replacement for the incentive programme that expired last fiscal year.

Capacity addition in wind power generation dropped by 39% between April and September, after having grown at a 22% annual compounded growth rate since 1992. This is according to data published by the Indian Wind Turbine Manufacturers Association (IWTMA).

Industry experts blame this on the lack of clarity on the government’s proposed generation-based incentive (GBI) scheme, the poor health of state government-owned distribution companies (discoms), and the prohibitive cost of capital.

GBI works on the basis of the number of units a firm generates — the more it generates, the more GBIs it gets. Wind power firms added 851.35 MW of capacity in the first half of this fiscal year, lower than the 1,402.66MW they added a year ago.

“The sector earlier enjoyed accelerated depreciation benefits, which ended in fiscal 2012, and these incentives were supposed to be replaced by GBIs but the government is yet to announce the framework for GBIs,” said D.V. Giri, secretary general of IWTMA.He expects the GBI scheme to be announced by November.

“But even if they do that, we will end up adding only between 1,800-2,000MW by the end of the current fiscal and will be nowhere near adding 3,000MW, which the country added in fiscal 2012,” said Giri.India aims to have 25,000MW of wind energy capacity by April 2017, according to its 12th Five-Year Plan (2012-17).

According to data on the ministry of new and renewable energy’s (MNRE) website, wind power firms added just 614.50MW of generation capacity between April and August. It did not table comparable figures for the year-ago period.