Poor show for renewable energy sector

Budget outlay for Ministry of New and Renewable Energy reduced

By Chandra Bhushan
Published: Thursday 28 February 2013

In the budget 2013-14, finance minister P Chidambaram reiterated India’s dependence on coal imports, which is likely to go up to 185 million tonnes in 2016-17 from the existing 100 million tonnes, but did not deliberate on the need to increase energy generation from renewable sources. In fact, the outlay of the Ministry of New and Renewable Energy (MNRE) has been reduced and so has been the plan for installing renewable energy projects.

The outlay of MNRE has been decreased from Rs. 4,323.36 crore in revised estimate for 2012-13 to Rs. 3,915 crore in the budget for 2013-14. The budget of MNRE in 2013-14 is about 0.6 per cent of the total Central plan budgetary outlay (including internal and extra budgetary support). In this budget, the provision of Central Financial Assistance (CFA) to both grid-connected and off-grid projects has been reduced. CFA for grid-connected projects has been reduced from 4,145 MW in 2012-13 to 3,000 MW in 2013-14. For the off-grid projects, the assistance has been reduced from 140 MW to 100 MW in the current fiscal, although the outlay has been increased from Rs 805.14 crore to Rs 910 crore.

The budget has announced two main schemes for the renewable energy sector; one non-committal, the other quite good.

The finance minister said that government will provide low interest bearing fund from the National Clean Energy Fund (NCEF) to Indian Renewable Energy Development Agency to lend to viable renewable energy projects, but there is no clarity on the scale of fund and rate of interests that shall be offered.

Boost to wind energy sector

The budget, however, is good for the wind energy sector. It has allocated Rs 800 crore to Generation Based Incentives (GBI) scheme for wind. A quick analysis reveals that this amount will be sufficient for incentivising more than 5,000 MW of wind installed capacity during FY 2013-14. Between March 2010 and October 2012, 2,021 MW capacities of wind projects had availed themselves of the GBI benefit.


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