Though more steps will be needed, the industrial sector of the country has enough reasons to welcome the maiden full Budget of the Narendra Modi government, electricity finance expert D. Shina has said.
In a statement here on Sunday, she said that announcements to set up five new ultra mega power projects of 4,000 MW with investment of about Rs.1,00,000 crore was considered a prompt step in bridging the huge gap between demand and generation.
The ambitious target to raise renewable energy capacity to 1,75,000 MW was a welcome step. This would act as a boost to the non-conventional energy initiatives.
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Dr. Shina said though the government stated its target of 24X7 power supply to every house by 2022, the Budget had not made any serious efforts to identify the weak links in achieving self-sufficiency in power.
“The main drawback of the target proposed is the failure to identify base load projects for this huge additional capacity. Such projects are vital for power system security as renewable energy projects are highly seasonal. Moreover to maintain the green image, the effective rate of clean energy cess on coal, lignite and peat has been increased to Rs.200 from Rs.100 per tonne.” This would increase power tariff. Higher tariff not only affected the consumers but also the operation of power projects as inability of prospective users and the utilities to afford high tariff would cause artificial cutting down of demand. Many power projects would not run to full capacity due to this.
Sops like additional depreciation on new plants and machinery, excise duty exemption on round copper wire and tin alloys for manufacture of Solar Photovoltaic ribbon and creation of the national investment and infrastructure fund could create positive results, Dr. Shina added.
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‘Doubling the effective rate of clean energy cess on coal, lignite and peat will lead to increase in power tariff.’