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India

India

INCENTIVE PLAN FOR SMALL INVESTORS

The Indian Renewable Development Agency (IREDA), Urja Vikas Nigam Ltd, an agency of the Madhya Pradesh government, and Consolidated Energy Consultants Ltd of Bhopal, a private sector company, have signed a memorandum of understanding for wind project development. Consolidated Consultants will have a 51% share of the venture, Urja Vikas Nigam 25% and IREDA 24%. The incentives closely follow energy ministry guidelines and are primarily meant to encourage small investors.

A project to develop 50 MW of wind power is being set up in the Indian state of Madhya Pradesh as a joint venture between the public and private sectors. Madhya Pradesh is the first state to form a joint sector company for development of a "wind energy estate" where small investors and local entrepreneurs can become involved.

The Indian Renewable Development Agency (IREDA), Urja Vikas Nigam Ltd, an agency of the Madhya Pradesh government, and Consolidated Energy Consultants Ltd of Bhopal, a private sector company, have signed a memorandum of understanding. Consolidated Consultants will have a 51% share of the venture, Urja Vikas Nigam 25% and IREDA 24%. Witnessing the signing were Digvijay Singh, chief minister of Madhya Pradesh, S Krishna Kumar, the minister of Non Conventional Energy Sources, and officials of the ministry and IREDA. An elated Krishna Kumar said: "This is a landmark event in the development of the renewable programme in the country." He later added that it was "the best package announced by any state."

Three locations with wind speeds ranging from 5-7 m/s have been identified in the state with a potential for 400 MW of installed capacity. The locations include Jamgodarni, Kheda, where 600 kW is already operating, and Kukru where the wind estate is being planned.

"The scheme is primarily to encourage small investors who do not have the means to set up wind farms. It is to prevent the small investors from getting hurt and also to prevent haphazard development. That is why we have limited the capacity to 1 MW for each investor. The joint sector will provide all facilities at a small charge. MNES is providing its 24% contribution through IREDA," says the director of the Ministry for Non Conventional Energy Sources, Ajit Gupta. "Tamil Nadu and Karnataka are looking into this concept of joint sector estates, too, and are expected to make announcements in the near future."

Madhya Pradesh has introduced market incentives for renewables which closely follow the MNES guidelines (see main story). Any company, organisation or individual can develop a project, or be part of a joint venture with Urja Vikas Nigam. Sales of renewables electricity are exempt from energy tax for five years. If the producer uses the power generated, the tax is refunded. Industrial companies developing renewables are also allowed sales tax exemption for any one of their industrial units in the state for a period of six years. The SEB will lease land, if available, for a period of 99 years for a token sum of INR 1.0 a year. All subsidies and concessions available to new industry in the state will also be available to renewables developers.

Power generated can be used by the developer, be sold to the State Electricity Board (SEB) for INR 2.25/kWh, or be sold to a high tension customer of the SEB at a rate to be decided by the vendor and the purchaser. A 2% wheeling levy will be charged to cover grid usage, irrespective of distance, and the Madhya Pradesh government will compensate the SEB for line losses at the rate of 4% of the power wheeled.

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