The ministry of new and renewable energy (MNRE) is working on the modalities to offer fresh fiscal incentives to investors in renewable energy as a part of its effort to add 12,000mw of green energy over the 11th Five-Year Plan period.
This would top up India?s renewable energy capacity to 22,500mw by 2012, the terminal year of the 11th plan.
V Subramanian, secretary for new and renewable energy, said an investment of at least Rs 60,000 crore is required from private players to add the new capacity. The government wants the entire 12,000mw addition to come from private sector projects.
?We want more energy to be supplied to the grid from these sources to bring a balance between conventional power and non-conventional power,? Subramanian said.
The MNRE has decided to offer incentives that may be long-term tax breaks or green energy certificates.
If green energy certificates have to be offered MNRE has to create a market for ?green certificates? in the country.
Green Energy Certificate, also referred to as Renewable Energy Certificates, are tradable papers that certify a private green energy manufacturer to sell their certificates to states that lack enough green energy supply.
According to the Electricity Act of 2003, every state government has to source a certain percentage of power from non-conventional sources.
The fresh fiscal incentives will be in lieu of the present ones offered to entities generating green energy. This will be for 10 years at least. Currently, the government allows a depreciation of 80% in the first year on plant equipment installed for generating green power. Green power producers also enjoy preferential tariff for power supplied to the grid.