According to a ministry official, the relaxing of standards will benefit both Indian and foreign companies by eliminating the payment of annual certification fees, averaging $230,000 abroad, and thereby easing foreign exchange pressures. "The scrapping of the certification will help us deploy the funds to other core areas," says NEPC director, T.K. Khemka.
The measure is seen as a response to disappointingly low investment in wind power in recent years. Tax incentives, including good depreciation rates, have proved less tempting than hoped. At the same time, intense competition among the energy giants, such as GE Power Systems, ABB Alstrom, and Mitsubishi Heavy Industries, has forced capital costs for thermal power plants down by as much as 30% since the early 1990s. Even though the price of renewables has dropped, some installations may cost almost twice as much as their thermal equivalents.
The picture is not entirely black for wind power, however. MNES reports that favourable wind speeds over the past year have contributed to wind energy production totalling 1.06 billion kWh from eight states, up from 988 million kWh the previous year. One state, Karnataka, notched up an impressive 117% increase in wind power generation year on year: 25.5 million kWh compared with 11.7 million kWh. Maharashtra's output increased by 24%, Madhya Pradesh by 22%, and Tamil Nadu by 14.7%. Andhra Pradesh, Gujarat and Kerala were the exceptions, with the effect of the Gujarat cyclone damage (Windpower Monthly, September 1998) reflected in a drop in output. India's total wind power output reached 44.8 million last year, according to MNES.