Interview with Jami Hossain who is the Chief Mentor & Co-founder Windforce. He is Currently on the National Council of Indian Wind Power Association , Governing Council of Indian Wind Energy Association and Treasurer of World Wind Energy Association

An interview with Jami Hossain who is the Chief Mentor & Co-founder Windforce. He is Currently on the National Council of Indian Wind Power Association , Governing Council of Indian Wind Energy Association  and Treasurer of World Wind Energy Association .

Q)Do you think time has come when RE power in India could compete with
conventional power without Govt support?

Ans) The answer to this question cannot be very simple ‘yes’ and ‘no’.
We must understand why we need government support. Is it because RE
Power is costly with respect to conventional power such as coal? If we
delve  deeper into the issue, we will find that in the long-term cost
and price are a function of governmental policies on various fronts.
For example in any country if the import duty on iron ore is less, we
may have cheaper wind turbines getting manufactured. Similarly, if
government was to impose a certain charge or tax on mining or
extraction of different materials from the surface of Earth, coal will
become costlier and then if there is a further charge due to pollution
and environmental hazards created by combustion of coal, the power
generated from it will be still costlier and then RE power will become
more competitive. These policies have to be driven by certain
environmental and societal rationality, which is not the case today.

Coming to the question, the government support comes in two forms 1)
in the form of policy and regulatory frameworks, which create an
enabling environment for RE projects to come up, and 2) In the form of
tax benefits and subsidies etc.  Support of the first kind will
undoubtedly needed on an ongoing basis. The second kind of support
directly to a private sector beneficiary is sometimes difficult to
manage. However,  fiscal support in the form of taxation policy or
interest subsidy etc., which can be managed, should be made available
to RE power.

At the same time, in the case of grid connected RE power, restrictive
practices and charges such as cross-subsidy charge imposed on third
party sale of electricity, open access charges, banking and wheeling
charges etc. should be done away with. Government should come in to
meet the cost of  setting up and operating transmission systems and
such costs, as far as RE power is concerned, should neither be loaded
on utilities nor on the RE power generators.  Such support will be
needed till the entire electricity sector starts to function under a
sound environmental and societal rationality.

In India, when we talk of government support to RE power, we should
also keep in mind that over the last sixty years, the government has
not only consistently supported conventional power such as
mega/ultra/super sized coal based power plants, large hydro projects
and nuclear projects but also has completely sponsored and facilitated
development such projects.

This has lead to physical and organizational infrastructure as well as
a mindset that on the one hand minimizes barriers to conventional
power and on the other hand imposes barriers on RE power.  An example
is the power grid, which emanates from large centralized power plants
and so called central  generating stations and is meant to transmit
power from these stations but the RE power is generated in a
geographically distributed and dispersed manner. There is sparse power
evacuation infrastructure to tap distributed generation. This creates
a great disadvantage for RE power.
The other aspect is the mindset that the electric power that utilities
can manage is only the power from large coal, hydro and nuclear power
plants and this mindset is so overwhelming that a twisted sense of
rationality prevails among the policy makers and policy making bodies
which prevents mainstreaming of RE power.

Till there is a level playing field not only in terms of costs and
prices but also in the form of organizational and physical
infrastructure and the mindset, government support will be needed.

Q) Regulators are currently contemplating to take away accelerated
depreciation benefits for wind projects, what do you think will be
impact of such action on wind energy growth?

Ans) Unfortunately, the move to do away with accelerated depreciation
is again coming from this twisted sense of rationality. If today we
have 17000 MW of wind power connected to the grid, it is almost
entirely due to accelerated depreciation. The policymaker is of the
opinion that end of accelerated depreciation will bring in IPPs.
However, the ground reality is different and the space left by
accelerated depreciation investors cannot be filled in by IPPs. The
move will harm the industry that according to some estimates employs
100,000 people.  Given the fact that there is a vast potential for
wind power in the country and that options of capacity addition for
the country are limited, the government should not only allow
accelerated depreciation to continue but also come up with policies
that remove barriers to investments in RE power.

Q) There has been reluctance shown by investors to fund REC based
projects, how do you think what Govt could do to alleviate risks for
investors for such projects?

Ans) The REC based projects are being set up on the premise that it
will be possible to sell these certificates to entities that need to
meet their RPO requirements. The investors can take this mechanism
seriously only if the meeting of RPO requirements is made legally
binding and if strong penalties are imposed for non-compliance.

Q) Is there any impact of European economic situation on wind projects
in India as well as globally?

Ans) There can be a short-term impact on investments due to European
economic situation. We need to understand that the flight of the
capital can take place  because the problem is more in the mind of the
investor as a risk perception rather than actually a real problem on
the ground. This risk perception can be addressed by strengthening and
improving upon investment enabling environment in the country. At the
end of the day “capital” has to be invested and if the risks are
minimized, it can flow to the projects. Therefore, the European crisis
can also be looked at as an opportunity by countries like India and
China. In the long-term since the economic growth is stagnating in
developed countries, developing countries like India that are also
democratic and have a robust legal system will become attractive to
the investors.

Q) Though MW scale projects are seeing growth, however small wind
projects are still not successful in India. What are the reasons and
how such a market could be developed?

Ans) Small wind projects may remain small in terms of the total
capacity installed. For example today the worldwide capacity of small
wind turbines is limited to under 400 MW as against 240000 MW
installed in case grid connected wind power. At the same time it must
be said that there is great requirement for such wind turbines in
niche markets and it is more a question of getting over the market
barriers than anything else.  In India itself rural domestic,
irrigation, niche applications could present a market size of the
order of a few gigawatts.

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