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Unlocking State wind energy potential

SEVERAL POTENTIAL investors in wind energy sector are either leaving the State in search of greener pastures or are sitting idle thanks largely to the State Government?s wrong policies and lackadaisical attitude towards utilising the huge potential of wind energy resources in the State.

india Updated: Feb 08, 2006 16:01 IST

SEVERAL POTENTIAL investors in wind energy sector are either leaving the State in search of greener pastures or are sitting idle thanks largely to the State Government’s wrong policies and lackadaisical attitude towards utilising the huge potential of wind energy resources in the State.

The magnitude of the issue can be gauged from the fact that against the gross potential of 5,500 mw (mega watt) and a technical potential of 1,050 mw wind energy in the State, it is producing a meagre 29 mw at present.

“Some very big investors like Cepco Industries have left Madhya Pradesh for investing in Karnataka which has a favourable climate for wind energy investments and several others are sitting idle waiting for a good wind energy policy,” said M K Deb, managing director of MP Windfarm, a Bhopal-based wind energy firm which has an installed capacity of around 15 mw in the State.

After a study conducted at 31 places across the State seven locations have been found to be suitable for windfarms. They are at Dewas, Betul, Shajapur, Ratlam, Sendhwa, Nagda and Khargone. “The State’s position at the national level could be assessed from the fact that it is producing just 29 mw of the total national production of 4,228 mw wind energy,” regretted MP Windfarm chief engineer DV Wadhwa.

The villain of the piece is the previous Congress Government led by Digvijay Singh which not only revised the sales tax incentives given to the wind energy sector but announced the most reprehensible step of implementing it with retrospective effect.

“The Digvijay Singh Government’s revision of sales tax incentives to wind energy sector in 1999 literally killed the whole enthusiasm of the investors. The whole thing came to a standstill as the investors lost faith in the Government,” Deb said.

In fact the Digvijay Singh Government’s sales tax incentive to the wind energy sector in 1996 was more than sufficient to attract huge investment in the State. But in 1999 the Government revised it with retrospective effect asking the investors to pay back the incentives given to them in the previous two years.

During the time the issue lingered on, the Central Electricity Act came into being in 2003 and subsequently the MP Electricity Regulatory Commission (MPERC) also came into being.

The wind energy investors approached the MPERC and after rounds of discussions, the MPERC announced a wind energy policy in June 2004. But unfortunately, the rate of Rs 3.97 per unit announced by the MPERC, was much below the industry expectation of Rs 4.54 per unit. The gap occurred due to some errors in calculations by the MPERC and the issue is once again pending with the MPERC which is expected to announce the new tariff any time, Deb said.

Deb said the State Government, as a good facilitator, could do a lot to encourage the much needed investment in this
sector. Apart from framing a master plan for wind farms in the State, the Government can be also get directly involved in giving replacement land to the Forest Department instead of individual investors getting involved in it.

First Published: Feb 08, 2006 16:01 IST