March 7, 2016
India

Government seeks to phase out all sub-1MW wind turbines built before 2000

By Kaavya Chandrasekaran, ET Bureau | The Economic Times | Mar 07, 2016 | indiatimes.com

The Ministry of New and Renewable Energy (MNRE) wants all wind turbines of less than 1MW capacity and built before the year 2000 phased out and replaced by new ones. It has circulated a draft wind repowering policy saying that its financing arm, the Indian Renewable Energy Development Agency (IREDA) will provide an additional interest rebate of 0.25% on loans taken for such repowering, apart from the rebate already available for new wind projects.

“Most of the wind turbines installed up to the year 2000 are of capacity below 500kW,” says the document. “It is estimated that over 3000 MW capacity installation are from wind turbines of 500 kW or below. In order to optimally utilise wind energy resources, repowering is required.”

Other benefits available for new wind projects such as accelerated depreciation (AD) or generation based incentive (GBI) will also apply for repowered ones. Such projects will also be exempted from honouring the power purchase agreements they have signed to provide power for the period in which the repowering is carried out. “Similarly, in case of repowering by captive users, they will be allowed to purchase power from grid during the period of execution of repowering,” the draft policy adds.

The policy will be implemented through state nodal agencies. “All states have come on board. We have formulated the policy based on extensive consultations. It will be executed in a week’s time,” said Varsha Joshi, Joint Secretary, MNRE.

“As per the new tariff policy, interstate transmission charges for renewable energy are already waived. Along with that, we are offering the incentive of an additional interest rate rebate. This will definitely move things forward,” she added.

But wind developers felt differently. “The incentives are not sufficient,” said Sunil Jain, President of Wind IPP Association and Member National Council of Indian Wind Power Association. “Along with replacing turbines, substations will have to demolished and new ones built. Most substations are 20 years old. Repowering is more expensive than putting up a new project.”

“If there had been a central grant of say Rs 50-75 lakh per MW to the states for repowering of wind projects, it might have been worked,” he added. He noted that the AD benefit had been reduced from 80% to 40% in the recent Budget. The GBI of 50 paise per MW of power produced was also expected to lapse in March 2017.

The draft policy does not mention any deadline for completion of repowering, or any penalties for not carrying it out.

India has an installed wind capacity of over 25,000MW, the fourth highest in the world after China, the US and Germany.