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Policy changes to boost investment in wind energy

Policy changes to boost investment in wind energy

To give a fillip to investment in India’s wind energy sector the Union Ministry for New and Renewable Energy has suggested certain policy changes. The Ministry wants to reintroduce ‘accelerated depreciation mechanismÂ’ which had earlier helped grow the wind energy industry.

Alok Srivastava, Joint Secretary in the Ministry told a business newspaper that the Ministry has recommended a few checks and balances to the accelerated depreciation mechanism.

Currently the proposal is before the Finance Ministry for its evaluation, he added. Alok Srivastava said that the Finance and Revenue Ministry raised objections for its extension. Now the Ministry has given its opinion and suggested a few changes for reintroduction. Once the Ministry gets clearance, it is likely to go before the Cabinet for final approval, he added.

The introduction of accelerated depreciation mechanism saw the country producing about 18,000 mw of wind energy. The mechanism expired on March 31, 2012 and was not extended.

In addition to incentives for wind energy projects, the Ministry is also focusing on grid connectivity for smooth evacuation of power.

Currently wind power projects are located in resource-rich pockets in South India, but are isolated. Now work is on to connect them with the national grid, which is likely by 2014, Srivastava said. Tamil Nadu has set up 7,100 mw of wind energy, but is unable to evacuate to other regions in the absence of grid connectivity, he added.

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