The Energy Regulation and Markets Review - Stikeman Elliott

India
Onshore and offshore wind power
Wind energy is the fastest-growing form of renewable energy in India. It accounts for
nearly 70 per cent of the installed renewable capacity in India. Wind power policies vary
from state to state, but there are non-binding guidelines from the Renewable Energy
Ministry on setting up wind projects. In a general comparison, wind power policies
in certain states are rated more highly for the incentives they provide and availability
of a (more or less) single-window clearance mechanism. Until recently, wind-power
projects could claim either accelerated depreciation of up to 80 per cent or generation
based incentives (i.e., a monetary entitlement per unit of electricity fed into the grid).
In a recent development, the 80 per cent accelerated depreciation has been done away
with for wind farms developed after 31 March 2012, and now only the standard 15
per cent accelerated depreciation can be claimed. Even the generation based incentives
scheme expired on 31 March 2012. However, there is speculation that generation based
incentives may be extended.
Development of offshore wind energy is also being considered in India. The
Renewable Energy Ministry recently constituted a committee to steer offshore wind
power development in India (especially in Tamil Nadu, Maharashtra and Gujarat).
The committee is entrusted with creating an institutional mechanism for integration of
offshore wind power with established uses of the sea; evaluation of the potential partners
(private or public sector) for setting up of pilot projects and evaluation of public private
partnership for off-shore projects.
Solar energy
Solar plants can be set up under the Renewable Energy Ministry’s Jawaharlal Nehru
National Solar Mission (‘the JNNSM’) as well as under state policies (particularly
favourable are policies in Gujarat and Rajasthan). The JNNSM was set up in 2010.
It aims at the commissioning of 20GW grid-connected solar power by 2022 and the
development and deployment of solar energy technologies in the country to achieve
parity with grid power tariff by 2022. While tariffs for purchase of solar power currently
offered under the JNNSM are applicable only its first phase (i.e., until 2013), the tariffs
announced by the certain state governments (e.g., Rajasthan and Gujarat) are more
attractive (although there has been some downward revision in 2012). Certain states
have also come up with competitive bidding for setting up solar projects.
While the number of solar developers opting for RECs is currently negligible,
with falling prices for solar plant equipment, a greater number of solar power project
developers may opt for the REC mechanism in the future.
Accelerated depreciation of 80 per cent continues to be allowed for solar power
projects. The Renewable Energy Ministry also has a generation-based incentive scheme
to support small grid solar power projects connected to the distribution grid (less than
33kV) to the state utilities. This benefit is only for selected projects and the scheme is not
open to accept new project proposals currently.
Bio-power and waste-to-energy projects
The Renewable Energy Ministry has proposed to launch the National Bio-Energy
Mission (on the lines of JNNSM) to boost power generation from biomass by facilitating
capital investments. Currently, the Renewable Energy Ministry provides for various fiscal
128