DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/2d5l73/annual_review_of_r) has announced the addition of the "Annual Review of Renewable Energy Sources" report to their offering.
The 12th Plan (v/s 11th Plan) renewable capacity addition to slowdown
CARE Research expects that in the 12th Plan (2012-17) wind energy capacity addition to slowdown due to removal of tax benefit. However, wind capacity addition is likely to maintain its dominant share in capacity addition. At present, the policy environment needs a boost to achieve as removal of Accelerated Depreciation (AD) scheme from April, 2012 is likely to act as dampener resulting into sharp slowdown in wind capacity addition
in the 12th Plan. Moreover, solar capacity addition is purely RPO driven; hence institutional framework needs to be strengthened for higher and sustainable capacity addition run-rate.
With AD benefit removed, capacity addition to fall; IRR to shrink by 300-400bps
AD benefit was removed from April 1, 2012, which was a major driver for wind installations in the 11th Plan. The country added 3.2GW of wind capacity in FY12 (last year of the 11th Plan), which is expected to fall sharply due to AD benefit removal. Consequently, CARE Research expects capacity addition to fall sharply from FY13 onwards. The Central Board of Direct Taxes (CBDT) issued a notification on 30th March 2012, that the depreciation on wind mills will be restricted to 15% from FY13 (with and additional 20% depreciation on equipments). This marks a significant change to the incentive structure as AD benefit typically increases project IRR by around 300-400bps, with other factors held constant. Thus, the industry would move strongly towards IPPs driven from a typical retail investor driven structure a few years ago.
JNNSM, the central solar scheme has experienced a good response from solar developers. The recent bids for the Phase-I, Batch-II projects reveal that the aggressive bidding from solar developers. This is primarily on account of falling costs of PV modules led by global capacity glut; improved technology based manufacturing process, economies of scale with entry of Chinese players in solar cell and module manufacturing.
Companies Mentioned
- Orient Green Power Company Limited
- Mytrah Energy Limited
- Azure Power
- Greenko Group
- Bermaco Energy Limited
For more information visit http://www.researchandmarkets.com/research/2d5l73/annual_review_of_r