India provides US$145 million incentive for wind energy

Funding expected to re-ignite growth in moribund sector.

India’s Union Budget for financial year 2013-14 also provides significant incentives for RE developers and producers.

The incentives will enable India to achieve its goal of installing 30,000 MW in RE capacity by 2017. It currently has an installed capacity of 26,920 MW. India, however, is having difficulty in attaining the target set for financial year 2012-13.

The government has reintroduced the generation-based incentive for the wind energy sector. Finance Minister P Chidambaram announced a financial package worth $145.5 million for this purpose.

The wind energy sector has been the most favored among all renewable energy technologies in India for the last several years, with developers being able to secure financing for projects based on a proven technology.

Chidambaram also said the government will tap the National Clean Energy Fund to provide funding to renewable energy projects at low interest rates. The government levies a tax of about US$1 per tonne of coal mined or imported into India.

Indian project developers have been seeking funds from international financial banks like IMF and the US Export-Import Bank. With this announcement, another source of cheaper loans is available to Indian project developers.

Chidambaram also announced incentives for waste-to-energy projects in cities across India. The technology remains in an early state with less than 100 MW capacity installed as of this January. The government-y had set a target to install 20 MW of waste-to-power projects in urban and industrial sectors in 2012–13, but only 6.4 MW capacity were added by January.

The government has announced it will provide financial support to city authorities that intend to set up waste-to-power projects.