Environment Ministry Relaxes Lease Rent on Wind Power Projects

At present, wind power companies pay an additional lease rent of ₹30,000/MW

August 26, 2019


To encourage investments in wind power projects and to provide clean energy at affordable prices, the Ministry of Environment, Forest and Climate change has decided to relax the lease rent of ₹30,000 (~$417)/MW charged for wind projects.

The decision was taken during a review meeting held recently in New Delhi.

Environment Minister Prakash Javadekar said that it is expected that the step taken will boost the investment in wind power projects and will help in providing wind power at a cheaper rate.

“The government envisages to meet maximum energy requirement by tapping renewal energy resources and to achieve the target of clean energy in a time-bound manner, various policies and regulations are being constantly updated,” he said.

According to the government, at present, to establish wind power project over forest land, the existing procedure requires payment of mandatory charges for compensatory afforestation and Net Present Value (NPV). In addition to the mandatory charges, the wind power companies had to pay an additional lease rent of ₹30,000 (~$417)/ MW.

However, this additional cost is not mandatory for other renewable energy projects such as solar power and hydroelectric projects. The additional cost for the generation of clean energy through wind power, in turn, escalate the per-unit price of power.

As per the Ministry of New and Renewable Energy (MNRE) report, the achievement of state-wise installed capacity of wind power projects between April to July 2019 totals approximately 1 GW, and the cumulative installation adds up to about 37 GW.

In July 2019, the state of Andhra Pradesh grabbed headlines due to the ongoing spat between the state government and developers. The situation escalated when the newly elected chief minister Jaganmohan Reddy’s government decided to cut down the costs in all the high-priced power purchase agreements (PPA) for wind and solar power projects signed during the term of the former chief minister Chandrababu Naidu-led government.

In April 2019, Mercom had reported that nearly 51 GW of wind projects were installed globally in 2018 wherein, India installed 2.2 GW of wind in the same year.



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