Pitfalls in renewable energy growth flagged

Auditor accuses govt for allowing undue benefit of Rs 22 cr to RIL

The CAG has highlighted major shortcomings by the government in the development of the renewable energy sector during the five years ended March 2013. This includes shortfall in achieving targets of 'renewable purchase obligation' and capacity addition, apart from allowing "undue benefit" to Reliance Industries (RIL).

While solar photovoltaic project developers availing generation-based incentive (GBI) are not eligible to avail accelerated depreciation (AD) benefit under the income tax Act, the Indian Renewable Energy Development Agency released GBI claims of Rs 22.49 crore for RIL. "This resulted in both GBI and AD being claimed by RIL from August 2010 to December 2012," CAG said in its report tabled in Parliament on Tuesday.

According to the report, India managed to achieve only 4.2 per cent and 4.5 per cent mix of green energy in its total energy supply in 2012-13 and 2013-14, respectively, against the national target of eight and nine per cent for the two years. It says Jammu & Kashmir and Himachal Pradesh had not set up any grid-connected solar projects even as they had the potential of 111,000 megawatt (Mw) and 33,840 Mw.

According to the CAG, the break-in provision of incentives to wind power developers by the government in 2012 and 2014 adversely affected capacity addition and the shortfall in evacuation infrastructure was impacting wind generation. "In Tamil Nadu, the quantum of wind power-backed down was 6,018 million units during 2007-2014, resulting in a loss of revenue to the extent of Rs 2,040 crore," the report noted.

The auditor also pointed out issues with the government's remote village electrification programme and cases of irregularities in distribution and purchase of solar devices. The CAG report highlighted several anomalies in the implementation of Prime Minister's special package for Arunachal Pradesh - non-completion of hydel projects due to non-availability of funds.

"RIL has not claimed accelerated depreciation for its 5-Mw solar power plant at Nagaur in Rajasthan, as mentioned in the CAG report. We would take it up with the concerned authorities and clarify at the earliest," said an RIL spokesperson.