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Power sector says Budget is a mixed bag

Thursday, 28 February 2013 - 9:57pm IST | Place: Mumbai | Agency: PTI
The Budget today evoked a mixed reaction in the power sector with large players slamming the import duty hikes, but those in the renewable energy space welcomed the proposal to incentivise wind energy projects.

The Budget today evoked a mixed reaction in the power sector with large players slamming the import duty hikes, but those in the renewable energy space welcomed the proposal to incentivise wind energy projects.

While some players criticised the upward revision of the import duty, from 1 to 4%, on steam coal imports, saying it will adversely impact the industry, others said the move will bring clarity on Customs department's operations.

"The announcement to equalise the custom and CVD for steam and bituminous coal used in thermal power generation at 2% is welcome as this provides clarity to otherwise claims that got raised by Customs department," Tata Power Managing Director Anil Sardana said.

However, Adani Group Chairman Gautam Adani said this move is "amusing" given the fact that the country is facing coal shortage.

"The move is a little amusing as the country has huge deficit in coal and the government is trying to minimise cost by augmenting coal supply through various steps for domestic production as well as opting for price pooling of domestic and imported coal," Adani said.

The Budget proposed generation-based incentives to wind energy projects and provided Rs800 crore for the purpose to the New and Renewable Energy Ministry.

"The re-introduction of generation-based incentives (GBI) is a timely intervention for the wind industry which was suffering for more than one year. This would rejuvenate the sector with more investments coming in," Indian Wind Turbine Manufacturers Association Chairman Ramesh Kymal said.

The proposal to allocate funds from the National Clean Energy Fund to enable low interest cost funding for viable renewable energy projects will give impetus to wind power generation, industry experts said.

"Reintroduction of the generation-based incentives and making low interest rate funds available from the National Clean Energy Fund will encourage not only domestic but also foreign investors, who will recognise wind as a potential investment opportunity," said Mytrah Energy's Vikram Kailas.


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