High Tariff Proposed For Solar, Wind Power
The per unit rate for thermal and large hydel plants ranges between Rs 1.0 and 2.0 per unit depending upon when the plant was set up. No one, however, has a yearly escalation clause like what the ministry has suggested. Considering the capacity of power generated from non-conventional sources is very small, the high tariff is facing opposition from many state governments. The ministry rate will apply to electricity generated through solar, small hydel projects and wind energy.
Ministry sources, however, are confident the rate will not be a barrier as its intention is to promote the exploitation of energy through this means.
Besides, the government had recently allowed 51 per cent foreign investment in non-conventional energy. This new development should make the sector attractive to foreign investors.
According to ministry records, there is already an installed capacity of 684 mw in private sector non-conventional energy projects. This is out of a total capacity of 732 mw, the balance being public sector and demonstration projects.
Since there is no pollution penalty from wind, solar and small hydel generated power, this area should be more attractive for foreign investors and for the environment.
Sources said the high rate was intended to make the sector attractive to investment. Along with the high power purchase rate, some incentives were available like a five-year tax holiday, 100 per cent accelerated depreciation, exemption of customs duty on 10 specified components and concessional duty of 25 per cent on full wind energy generator.
Out of all the states, Tamil Nadu has accepted all the suggestions of the ministry exploitation.