Karnataka Government Proposes Amendment in Land Reforms Act to Facilitate Green Energy Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--The state government of Karnataka is seeking an amendment to its existing Land Reforms Act to simplify land acquisition for the development of renewable energy projects. Presently, it takes about one year to receive land acquisition clearances. If the amendment is approved, companies can acquire land for these projects immediately. Talking to media at the sidelines of the 14th Annual General Meeting of the Indian Wind Power Association (IWPA) (Chennai, Tamil Nadu) in Bangalore, K. Jairaj, Additional Chief Secretary, indicated that the proposed changes in the Land Reforms Act would ease land acquisition problems for developers. Jairaj also pointed out that under the state's new renewable energy policy, the renewable energy sector has been accorded industry status. The status will provide several benefits, incentives and simplified procedures to encourage private-sector participation in renewable power projects.

Karnataka, which has a wind power generating capacity of 1,866 MW, has the potential to produce 12,000 MW from this renewable source. By 2014, the state government has set a target of 4,000 MW of new capacity. To encourage investments, the state government is also providing a single window clearance system for these projects. Jairaj also said that the procedure for obtaining clearances in Karnataka would be quicker than receiving approvals from the federal ministry of environment and forests. The state government also will establish an empowered committee to expedite project approvals. This fiscal year, about 22 wind power projects will contribute 712 MW to the state grid. Of this, 80 MW has been commissioned during the first quarter. During 2010-11, the state proposes to add 130 MW from mini-hydroelectric and 60 MW from solar power projects.

In a related development, Debashish Majumdar, the chairman and managing director of the Indian Renewable Energy Development Agency (IREDA) (New Delhi), has urged green power producers to reduce capital costs and improve efficiency in power production. IREDA currently has an incentive scheme for renewable energy projects with capacities of up to 4,000 MW. The scheme, which has not been very successful, expires on March 31, 2012. On July 21, 2010, industry representatives are meeting with IREDA officials and other agencies to propose changes in the scheme.

Commenting on the IREDA incentive scheme, K. Kastoorirangan, the chairman of IWPA, urged the federal ministry of power to increase accelerated depreciation for wind power projects to 100% from 80%. Seeking priority status in financing for this industry, members of IWPA indicated that exemption of capital subsidy for wind power installations and elimination of alternate and electricity consumption tax will make the sector more profitable and competitive.

In a related development, two recent reports titled "Renewables--2010 Global Status" and "Global Trends in Sustainable Energy Investment--2010," published by the United Nations (UN), have revealed that despite the global economic slowdown, there was sustained development and investments in the renewable energy sector. According to Achim Steiner, the executive director of the UN Environmental Program, wind power investments worldwide were about $67 billion in 2009. In 2009, about 80,000 MW of new global wind power capacity was added. Nearly 33.33% of this capacity addition was in China. In the future, Asia, Oceania and Europe will continue to remain growth drivers for this industry.

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