Environment

Government relaxes mandatory charging of lease rent for wind power projects

22.08.2019

The Ministry of Environment, Forest and Climate change has decided to relax the mandatory charging of lease rent of Rs. 30,000 per MW for wind power projects, in order to fulfil its commitment towards providing clean and green energy at cheaper rate. In a review meeting, Union Minister for Environment, Forest and Climate Change, Shri Prakash Javadekar took a conscious decision to relax the condition of charging the lease rent of Rs. 30,000 per MW for wind power projects. This step is expected to boost the investment in wind power projects and will help in providing wind power at cheaper rate. The government aims to meet maximum energy requirement by tapping renewal energy resources and to achieve the target of clean energy in a time bound manner.

In past recent years, the wind power generation capacity in India has significantly increased which is a remarkable feat in renewable energy sector. India is now among top five countries in the world having installed largest wind power capacity. In India, wind power capacity is mainly spread across the South, West, North and East regions and among them Tamil Nadu, Maharashtra Gujarat, Rajasthan leads the respective power generation in wind power. With the relaxation of mandatory charging of lease rent, it will encourage and further infuse the confidence in wind power generation sector in India. The role of new and renewable energy has assumed increased significance with the growing concern for the country's energy security. Energy self-sufficiency was identified as the major driver for new and renewable energy in the country in the wake of the two oil crisis of the 1970s.

Presently, the existing procedure requires payment of mandatory charges for compensatory afforestation and Net Present value (NPV) in order to establish wind power project over forest land. Apart from mandatory charges, the wind power companies are required to pay additional lease rent of 30,000 per MW. This additional cost is not mandatory for other renewal energy projects such as solar power and hydel electric projects. Additional cost for generation of clean energy through wind power, in turn escalate the per unit cost of power at consumer level.

Encouragement and Promotions of such projects also strengthen Government of India commitments towards International Agreements, and one of the National Commitment pledged in Paris in 2015 that is to have 40% of the power from renewable resources by 2030. The Ministry has been interacting with developed and developing countries for co-operation in New and Renewable Energy. Currently, India has over achieved the target and is well on track to ensure that more than 50% of installed capacity will come from renewable by 2030. Major share of renewable power capacity in India is from wind energy.

Tags : Lease rent Charges Removal

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