The Income-tax Act, 1961, provides tax breaks for around 10 years to companies building wind energy projects in the nation. It also offers depreciation benefits of up to 80% of the investment in the very first year of the project’s operation. However, NTPC chairman and managing director R.S. Sharma said this was not why they had decided to set up the projects.
Sharma didn’t specify the sites in the two states where NTPC intends to set up the projects.
Sharma said this capacity was separate from the one it had planned in a joint venture (JV) with the Asian Development Bank (ADB), and others.
The JV with ADB, which would also have GE Energy Financial Services, Kyushu Electric Power Co. and Brookfield Renewable Power as partners, would have a renewable energy power generation capability of 500MW. NTPC will hold 40%, ADB 20%, and other companies the remaining 40% in the proposed venture, as reported by Mint on October 12, 2007.
“The JV agreement with ADB is to be signed up 500MW through the JV does not mean that we are going to limit this capacity,” Sharma added.
Wind power capacity creation needs relatively high capital compared to conventional power projects based on coal or gas.
While it takes a capital investment of INR40.2 million to INR40.5 million per MW of power generated through coal-based or gas-based projects, wind-based projects require INR60 million to INR70 million per MW.
