Govt announces scheme for making renewable energy cheaper

Govt announces scheme for making renewable energy cheaper New Delhi: Terming as priority the promotion of clean and green energy, Finance Minister P Chidambaram Thursday announced a scheme for making of renewable energy cheaper by providing for low interest bearing funds.

He also proposed a scheme to encourage cities and municipalities to encourage waste-to-energy projects in PPP mode.

"Clean and green energy is a priority of the government. However, despite cost advantage in labour, land and construction, consumer pays a high price for renewable energy. One of the reasons is high cost of finance," Chidambaram said in his Budget speech in Lok Sabha.

The low interest bearing funds provided by the National Clean Energy Fund (NCEF) will be given to the Indian Renewable Energy Development Agency (IREDA) for five years.

In order to provide low cost finance, the government will provide low interest bearing funds from the NCEF to IREDA for renewable energy projects, he said, adding that the scheme will have a life span of five years.

For promoting energy generation through garbage, the Finance Minister said, "I propose to support municipalities that will implement waste-to-energy projects through different instruments such as viability gap funding, repayable grant and low cost capital."

Observing that "India tosses out several thousand tonnes of garbage each day, he said, "We will evolve a scheme to encourage a scheme to encourage cities and municipalities to take up waste-to-energy projects in PPP mode which would be neutral to different technologies."

Chidambaram also allocated Rs 800 crore as an incentive for generation of wind energy.

"The non-conventional wind energy sector deserves incentives. Hence I propose to reintroduce 'generation-based incentive' for wind energy projects and provide Rs 800 crore to the Ministry of New and Renewable Energy for the purpose," he said.