“No grid access for over 56 per cent of rural households”
CHENNAI: The new power-generation based incentives planned for the renewable energy sector will not phase out the existing accelerated depreciation incentives, Union Minister for New and Renewable Energy Farooq Abdullah said here on Friday.
Allaying the concern among people in the sector that after the new incentives were introduced, the existing incentives would be phased out, Dr. Abdullah said, “Both things will go together.” But for this to succeed, the Ministry of Finance would have to be on board, he said.
He was addressing the valedictory session of Green Power 2009, an international conference and exposition on renewable energy, organised by the Confederation of Indian Industry, here. The theme of the conference was ‘mainstreaming renewable energy into India’s electricity sector for achieving energy security’.
The Indian Renewable Energy Development Agency Limited, established by the Ministry to promote, develop and extend financial assistance for renewable energy and energy efficiency/conservation projects, would be provided Rs.10,000 crore so that renewable energy projects could be given adequate finance, Gauri Singh, Joint Secretary to the Ministry, said.
Dr. Abdullah said the country faced an energy demand-supply gap of 8 per cent with peak shortages to an order of 11-12 per cent. Grid access was yet to be provided to over 56 per cent of rural households. The solution to this challenge was to maximise the use of renewable energy, he said.
Around 5,800 remote hamlets had been provided with renewable energy solutions, he said, adding that within the next three years, the Ministry would attempt to cover all villages and hamlets that could not be covered by the grid.
The Ministry would also aggressively pursue fixing certain percentage targets for purchase of renewable power in all States — 14 States have already done so, he said.
Of the total installed power generation capacity, renewable power installed capacity accounted for 9 per cent, which was 14,366 MW of renewable power, Dr. Abdullah said. This comprised mainly of wind power, which was about 10,330 MW, small hydro power of about 2,450 MW, and bio power of about 1,900 MW.
The challenge before the renewable energy sector was to make the cost of renewable energy competitive with respect to conventional energy, he said. The cost of renewable power would come down with technological developments and when economies of scale came into the picture, he said.