Policies & Politics

Published on March 21st, 2016 | by saurabh


India Issues Draft Policy To Incentivise Repowering Wind Energy Projects

March 21st, 2016 by

As India targets 60 GW installed wind energy capacity by 2022 the government is looking to push the industry towards more efficient and larger capacity wind turbines.

The Ministry of New & Renewable Energy recently announced a draft policy for repowering old wind turbines. The policy essentially calls for the replacement of all wind turbines with rated capacity of less than 1 MW. According to the ministry, majority of the wind turbines installed prior to year 2000 are of capacity less than 500 kW and represent an estimated 3 GW capacity.

The draft policy includes attractive incentives for project developers willing to replace old turbines. The Indian Renewable Energy Development Agency (IREDA) shall provide loans to such developers at an additional interest rate rebate of 0.25%. The projects shall also be eligible for accelerated depreciation, a tax incentive available to project developers.

The state governments shall also be responsible for the smooth transition of the project during the repowering process by providing transmission infrastructure. Project developers shall also be provided with additional land, if required, for repowering the existing projects. The project developers shall also be exempted from any penalties for reduced or no sale of electricity during the repowering period.

The state utilities shall be mandated to procure a set minimum percentage of power from the new turbines; any additional power, resulting from the higher efficiency turbines, shall be eligible for sale to the utilities at prevailing feed-in tariff rates or to commercial and industrial consumers.

Some project developers have, however, raised concerns about the proposed policy. They claim that incentives being offered are not sufficient enough to encourage repowering and that setting up new projects is much cheaper than replacing existing wind turbines and power evacuation infrastructure.

Image Credit: Michael Hoefner | CC-BY-SA 2.5

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