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The mood among wind farm developers in the windy Indian state of Tamil Nadu is buoyant. Already the private sector has commissioned 255.35 MW of wind farms there and a veritable wind rush for land continues.

Autolec, a manufacturer of water and oil pumps with a turnover of INR 400 million, was the first in Madras to install a private wind turbine, bought from NEPC-Micon, the Indian offshoot of Micon of Denmark. Mr N Balasubramanium, deputy general manager at Autolec, is brutally honest in his evaluation. " We got into wind energy to tap its potential for tax write offs. Today, though, it is the electricity it provides us which is the attraction." Autolec's power supply is augmented by wind energy and by investing in generating plant the company has secured a promise from the utility that it will not be subject to power cuts. "We would require at least six more machines to meet our requirements," says Balasubramanium, adding that it is even considering putting up a 600 kW unit in Coimbatore. "Though the preference now seems to be Karnataka and Gujarat for new developments," he comments.

Another satisfied customer is Mr Venkatraman of Prakash Industries who has bought Danish Vestas turbines. Having already installed 40, 225 kW units he is renewing his faith in wind by planning to install another 60 machines by September. Tax write-offs are not his interest. "We do not need depreciation. We require power. In that we are thinking big," he says.

Many developers talked about problems that continue to plague the industry, such as securing land. "Too much energy and money goes into fighting the problem in court. The government needs to do something about legal stays and infringement norms that take a long time to be cleared as no rules are laid down," says one harassed developer. He was referring to complaints by villagers filed in court which ranged from oil from wind turbines that might fall on the crops to the shadows from turbines cast on the land "This is a matter which the government needs to look into by making the process a single window clearance."

Escalating land prices, though a growing headache for smaller developers, do not seem to be much of a problem for the bigger sharks. Land prices which last year were INR 5000 an acre in Coimbatore are now running at INR 80,000 and at Muppandal, a prime area for developers, buyers are still competing for sites at INR 300,000 an acre. Says one buyer: " The cost goes up every day. We need to take boxes of cash to finalise deals on the spot."

Do developers feel the bubble will burst? Most say government support is only needed for five years before the sector is self sufficient. There is still doubt, though, that without tax credits the incentive to invest would not be great enough. Mr Muthukrishnan, financial controller at Chettinad Cement was honest enough to say that wind was a lucrative investment because of the depreciation clause which provides companies with a tax holiday for five years on their entire income. His company has already installed 10 MW in Kethanur in the Coimbatore district. Recently it bought 700 acres of land in Muppandal for 10-15 MW more. " We are a power oriented company. By investing in wind, we are saving tax and creating an assett.

Interestingly, a candid and confident Rajeev Bakshi of wind turbine manufacturer RRB Vestas says: " We are being choosy about our clients for the sake of our reputation. We refuse to sell to those only looking to wind for its tax benefits." Raj Kumar of NEPC-Micon seems to share the philosophy expounded by his competitor. "We have targeted only those customers buying wind, not those buying tax credits," he says Jens Jacobsen of Vestas agrees. "Wind energy in India is based on two types of clients -- those looking for tax benefits and those who will be a customer now and, hopefully, also in the future."

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