Environment Ministry to relax lease rent on wind power projects

Union Ministry of Environment, Forest and Climate change (MoEFCC) has decided to waive off or relax mandatory charging of lease rent of Rs.30,000 per Mega Watt (MW) for wind power projects. This decision was taken in a review meeting chaired by Environment Minister Prakash Javadekar and further enhances government’s commitment towards providing clean and green energy at cheaper rate.

Background

Centre government envisages towards meeting maximum energy requirement by tapping renewal energy resources and for achieving the target of clean energy in a time bound manner, various policies and regulations are being constantly updated by government.

At present, for establishing a wind power project over forest land, the existing procedure requires wind power companies to pay mandatory charges for compensatory afforestation as well as Net Present value (NPV). In addition to these mandatory charges, wind power companies had to pay additional lease rent of Rs.30,000 per MW. This additional cost is not mandatory for other renewal energy projects for instance solar power and hydel electric projects. Thereby, this additional cost for generation of clean energy by wind power, in turn escalate per unit cost of power at consumer level.

It is expected that this step to waive off lease rent of Rs.30,000 per Mega Watt for wind power projects will boost investment in wind power projects and will help in providing wind power at cheaper rate.

Significance

Promotions of such renewal energy projects strengthens Centre Government’s commitments towards International Agreements including one of National Commitment pledged during Paris climate conference (COP21) in December 2015, which was to have 40% of power from renewable resources by 2030. Currently India has over achieved its target and is well on track to ensure that more than 50% of our installed capacity will come from renewable by 2030.

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