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Posted on Nov 26, 06:11PM | IANS
Wind turbine manufacturers Monday hoped that the government will bring back the scheme linking generation based incentives (GBI) to the local content in windmills with effect from April 2012.
Wind power producers were given an incentive of 50 paise per unit generated subject to a cap of Rs.62.5 lakh per MW of installed capacity. The scheme ended March 31 this year.
"Higher GBI for machines with higher local content is a good idea. But the industry is not clear whether the GBI will be there this year," said Madhusudan Khemka, managing director and vice chairman of Indian Wind Turbine Manufacturers Association (IWTMA).
He said the local content in windmills made in India ranges between 65-90 percent.
But Ramesh Kymal, Gamesa Wind Turbine Pvt. Ltd. chairman and managing director, termed it as a "dangerous thing to talk about".
He said China had similar local content condition and the cost of machines went up.
Kymal said it is the cost of the wind mill that ultimately matters and not the local content.
However, an industry expert not wanting to be named told IANS that such a move would be welcomed by several small players as their machines are fully localised.
According wind power industry officials, the government is inclined to bring back GBI and hoped that it would be with retrospective effect from April 1, 2012, onwards so that those who have put up their wind mills this year do not lose out.
Khemka said the ITWMA has hired consultancy firm Ernst and Young to study the wind power sector in India in detail and present a report.
Though several state governments are now coming with solar power policy IWTMA does not see that the fortunes of wind is blowing towards the solar power sector.
"Solar and wind will not be competitive. On the other hand there can be a combined wind and solar power farms," D.V. Giri, secretary general, IWTMA, said.
Khemka said the focus of the industry on independent power producers (IPP) as the future growth of the sector would be fuelled by them.
He said several Indian and foreign groups of investors are interested in wind IPPs.
But Kymal said the wind power sector is facing several challenges like the non-adherence to renewal purchase obligations (RPO), withdrawal of GBI and accelerated depreciation benefits for the investors.