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India

Brave new targets from India

India has set a new goal of 2000 MW of installed wind power for the period 2002-2007 and is expected to call for a further 3000 MW as part of a strategy for 2007-2012. Wind power capacity today is 1340 MW and is seen as the major contributor to a new 2007 target of 4055 MW of renewables capacity outlined in the government's 10th five year plan. Biomass is expected to contribute 1000 MW to the target, small hydro 800 MW, solar thermal 140 MW, waste to energy 100 MW and solar PV just 15 MW.

The 11th five year plan is already on the drawing board and is said to be seeking 5000 MW from wind by 2012. Prime minister Atal Bihar Vajpayee recently confirmed that at least 10% of the 100,000 MW additional generation required by India by 2012 should come from renewables.

Industry confidence that the 10% target can be met is low, however. Developers in Tamil Nadu say it is "extremely ambitious" under current policy. A government source agrees, saying targets can only be met if states announce and implement their renewable energy policies.

Under the existing regime, central government's pro-renewables policy and state energy policy often appear at loggerheads: few states actually have a renewables policy while many of those that do are withdrawing them. As a result, the Indian wind power program has suffered serious setbacks and there are fears it could now be derailed. The states of Andhra Pradesh and Tamil Nadu have withdrawn permission for sales of wind power directly to consumers, while in Karnataka, charges for wheeling power on utility lines have gone from 2% to 20%.

The government source notes: "Given that in Tamil Nadu, the once-fastest developer of wind projects, no financial institution is willing to give loans, one can hardly see the targets being realised." Tamil Nadu today has 813 MW of wind, more than half of India's total. But in the last five years just 140 MW went up, contrasting sharply with 1991-96 when 673 MW went up.

Tamil Nadu's electricity minister, D. Jayakumar blames the slow down on the serious financial difficulties facing the Electricity Board. It is unable to offer the attractive packages which lure wind developers to other states -- notably Maharashtra, which allows third party sales and offers 30% capital subsidies for wind plant. During 2000-2001, Maharashtra installed 111 MW of wind capacity, more than twice the 42 MW achieved by Tamil Nadu.

The state government of Tamil Nadu took a decision "in principle" five years ago to fix the wind tariff at INR 2.70/kWh ($0.057) for new plant, with automatic 5% price rises each year. The tariff has remained at INR 2.25/kWh ever since.

Deputy general manager of the Tamil Nadu Electricity Agency, N.Parasuraman, says the power board is considering allowing third party sales. "We cannot afford to leave wind power growth at the present low level. One way is to consider interstate/inter utility wheeling." Market mechanisms to encourage better performance from wind turbines is also being considered. "The government may consider linking tax concessions and other benefits to measurable performance criteria such as capacity utilisation factor," says Parasuraman. "With improved siting, it should not be difficult to achieve better performance."

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