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Union finance minister Arun Jaitley's budget announcement to double the green energy cess on coal to Rs 200 per tonne will boost renewable energy generation, industry CEOs have said.
The government has set an ambitious target to achieve 175,000 megawatt (Mw) of green energy by 2022 including one lakh Mw of solar power, 60,000 Mw of wind energy, 10,000 Mw of biomass and 5000 Mw of small hydro projects.
The big push for renewables will boost both equipment makers in both wind and solar and power producers. India's current renewable generation is around 34,000 Mw. Solar generation in India is around 3,000 Mw and manufacturers of solar photovoltaic modules are largely catering to export market because of limited generation in India. The government's push for clean energy will also help manufacturers of solar inverters such as ABB and turbine makers including Suzlon.
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“Increasing the coal cess from Rs. 100 to Rs 200 provides impetus to clean energy,” said Suzlon Group chairperson Tulsi Tanti. He added that government should also provide interest rebate to companies for investing in captive renewable power.
Doubling of coal cess should allow the government to strengthen the grid and further incentivise the clean energy sector, said Sumant Sinha, Chairperson, ReNew Power.
The cess is collected as National Clean Energy Fund and is disbursed for renewable energy based initiatives and power projects. The additional cess would fetch Rs 12,000 crore annually in the NCEF pool. The total amount in NCEF till yet is close to Rs 40,000 crore. The sad part however is that the disbursal of money is slow. Officials in the ministry of new and renewable energy have however raised this concern on several occasions that the projects to be funded from NCEF are a huge waiting list.
In the past three years of its existence, projects totalling Rs 12,000 crore were sanctioned to be funded through the money collected in NCEF but the ministry has received partial amount, in bits and parts.
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