Central Government Policies

Central government policies have favored many Wind Energy companies to set up Wind Power projects. power The General guidelines for developing Wind Power Projects are available here. Other policies and programmes are discussed below.

CERC Tariff orders for procurement of power from Wind Energy Generators

Central Electricity Regulatory Commission in its order dated 16/09/2009 introduced its regulations and tariff orders for procuring wind power into the grid; for control period from 16/09/2009 to 31/03/2012. The tariff structure consisting of fixed cost components: Return on Equity, Interest on loan Capital, Depreciation, Interest on Working Capital and Operation & Maintenance Expenses. Detailed tariff structure and regulations are available here.

Description	CERC Regulation
Capital cost	Rs5.15 Crore/MW, linked to indexation formula
Commercial operational life (including evacuation systems)	25 years
Return on Equity	19% for first 10 years and 24% from 11th year pre-tax
Debt Equity Ratio	70:30
Interest on loan	Average SBI long term PLR plus 150 basis points
Depreciation	7% per annum
Interest on Working Capital	Average SBI short term PLR plus 100 basis points
Operational and Maintenance cost	Rs. 6.50 lakh/MW
Escalation	5.72% per annum
Capacity Utilization Factor	for wind power density 200-250: 20%for wind power density 250-300: 23%for wind power density 300-400: 27%for wind power density above 400: 30%
Sharing of CDM Benefits	First year: 100% to the project developerSecond year: 10% beneficiaries,to be increased at 10% per annum upto 50%.Thereafter to be shared on equal basis
Taxes and Duties	Tariff determined should be exclusive of taxes and duties levied by government provided allowed as pass through on actual basis

Accelerated Depreciation

The main incentive for wind power projects in the past, was accelerated depreciation. This tax benefit allows projects to deduct upto 80% of value of wind power equipment during first year of project operation. Investors are given tax benefits upto 10 years. Wind Power producers receiving accelerated depreciation benefits must register with and provide generation data to IREDA and are not eligible to receive more recent Generation Based incentives.

Indirect Tax Benefits

This includes concessions on excise duty and reduction in customs duty for wind power equipment. Wind powered electricity generators and water pumping wind mills, aero-generators and battery chargers are except from excise duties. Indirect tax benefits for manufacturers of specific energy parts vary from 5-25% depending upon the component. Other direct tax benefits & liabilities are shown here.

Central-level Generation-based Incentives

Offered by the central government since June 2008 and administered by IREDA, the GBI for wind is available for independent power producers with a minimum installed capacity of 5 MW for projects commissioned on or before 31/03/2012. As of December 2009, the GBI is set at INR 0.50/kWh (USD 0.01/kWh) of grid- connected electricity for a minimum of 4 years and a maximum of 10 years, up to a maximum of INR 6.2 million (USD 140,000) per MW. The scheme will deploy a total of INR 3.8 billion (USD 81 million) until 2012 and aims to incentivize capacity additions of 4,000 MW. Wind power producers receiving a GBI must register with and provide generation data to IREDA. The GBI is offered in addition to SERC’s state preferential renewable energy tariffs. However, IPPs using GBIs cannot also take advantage of accelerated depreciation benefits. The GBI program will be reviewed at the end of the Eleventh Plan and revised as deemed appropriate. As of December 2011, 58 projects had been registered under this scheme with over 288.8 MW commissioned. (Tamil Nadu-30, Rajasthan-21, Gujarat-3; Andhra Pradesh, Maharashtra and Karnataka-1 each). More details are available here.

Renewable Purchase Obligations

Several states have implemented RPOs with a requirement that renewable energy supplies between 1% and 15% of total electricity. The impact of the RPOs on wind development may depend on the penalties and enforcement of the targets as well as an effective REC market to promote development of areas of the country with the most abundant wind resources. More details are available under state initiatives and policies towards Wind Power development.

Renewable Energy Certificates: framework on Forbearance and Floor Prices

This is framed to be applicable from 1st April 2012 for a control period of 5 years.

In Rs/MWh	control period upto FY 2012		Control period 1st Apr 2012 onwards
In Rs/MWh	Non Solar REC	Solar REC	Non Solar REC	Solar REC
Forbearance Price	3,900	17,000	3,480	13,690
Floor Price	1,500	12,000	1,400	9,880

More details on the APPC and RE tariffs is available in the “”Order on Forbearnace & Floor Price dated 23-8-2011”.

Small Wind Energy and Hybrid Systems Programme

This programme is implemented through State Nodal Agencies for meeting water pumping and small power requirements in rural/semi-urban/urban windy areas for the categories of users:

Individuals, farmers, NGOs, Central / State Government agencies, local bodies and Panchayats, Autonomous Institutions, Research Organizations, Cooperative Societies, Corporate Bodies, Small Business Establishments, Banks, etc.

Category	Cost	Central Financial Assistance
Gear type Water Pumping Windmill	Rs. 80,000	Maximum 50% of Ex-works cost in general placesMaximum 90% of Ex-works for un-electrified islands
Auroville type Windmills	Rs.1,50,000
Wind Solar Hybrid Systems	Rs. 2,50,000/kW	Rs. 1,50,000/kW for Government, Public, Charitable, R&D, Academic and other non profit making organizations
Wind Solar Hybrid Systems	Rs. 2,50,000/kW	Rs. 1,00,000/kW for other beneficieries not covered above

A cumulative capacity of 608kW of wind solar hybrid systems and 1180 water pumping windmills have been installed by 31^st July 2010. Technical Specifications and list of small windmills and hybrid wind systems manufacturers is given here.

State Governments' Policies

Several states have come up with Renewable energy policy. Such Policies favor development of state in wind energy power production- opening up new strides in Wind Energy Busines Opportunities and new career options. The states have not framed out separate Wind Energy Policy but the RPO Obligations and other criterions for Wind Power Production has been emphasized in several State Renewable Energy Policies. Summary of those policies are discussed below.

State	Wheeling	Banking	Buy-Back	Third Part Sales	Capital Subsidy	Other Incentives

Andhara Pradesh	5 % of energy wheeled	Not allowed	Rs. 3.50//KWh w.e.f. 09.09.2008 (frozen for 10 years)	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	Industrial Status	Reactive Power: 10 p/KVARh upto 10% & 25 p/ KVARh above 10%.
Tamil Nadu	5% of Energy	5% (12 months financial year April to March)	Rs. 3.39/ / KWh (No Escalation)	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	Nil	Reactive Power: 25 p /KVARh upto 10% & 50 p / KVARh above 10%.
Karnataka	5% of Energy	Allowed @ 2% of energy Input	Rs. 3.40/ / KWh without any escalation for 10 years of commercial o/ation	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	No Electricity Duty or 5 Years	Reactive Power: 40 p / KVARh
Kerala	To be decided by SERC	To be decided by SERC	Rs. 3.14/ KWh for 20 years	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs
West Bengal	7.5% of energy fed of grid		Rs. 4/ KWh	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs		Reactive Power: 20 p /KVARh
Gujarat	4% of energy	Settlement to be done month to month & surplus energy at end of month & surplus energy at end of month shall be deemed as sold to Utility as / Tariff Rate.	Rs. 3.50/KWh for 20 years	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	Electricity duty exempted	Reactive power < 10% energy wxempted, then 10 p/ KVARh. Reactive Power > 10% of energy expoeted, then 20 p/ KVARh
Madhya Pradesh	2% of Energy	Allowed, but proposal for this invited from DISCOM	Year wise rates (Rs./kWh) from 1st to 20th year 1styr- 4.03 2nd yr - 3.86 3rd yr- 3. 69 4th yr- 3.52 5th yr - To 20th yr - 3.36	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	No Electricity Duty for 5 years	Reactive Power: 27p/KVARh
Maharashtra	2% of Energy + 5% as T&D Loss	12 Months	Rs. 3.50/KWh (first year of commissioning) (Escalation of 15 p / year for 13 years)	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	Power evacuation arrangement, Approach Road, Electricity Duty, Loan to Cooperative Societies	Reactive Power: 25 p/KVARh
Rajasthan	50% of normal charge as applicable for 33 KV, in addition to the transmission charges of 3.6% 8 surcharge	Six Months (Apr. to Sept. 8 Oct. to March. Utilization of banking energy not /mitted in Dec. to Feb.)	Rs. 4.2S/ KWh for Jaisalmer, Barmer 8 Jodhpur. Rs. 4.50/KWh for all other districts	Allowed under Electricity Act 2003 subject to regulation framed by respective SERs	Exemption from Electricity Duty @50% for 7 years	Reactive Power 5.75 p/KVArh with escalation of 0.25 p/year

Other details of state renewable energy policies are avaialble here. Separate pages on Tamil Nadu, Karnataka and Andhra Pradesh policies are discussed.

Wind Energy Scenario in India

Wind Energy Policies: State and Central Government policies

Wind Energy News and Updates

Wind Energy Companies & Projects

Wind Energy Business Opportunities

Wind Energy Education and Careers

Wind Energy Generation: Turbine Technologies