The proposal would club India with a select group of countries that tax carbon
emission directly and boost the renewable energy initiative. While the initiative
could turn power stations more efficient and less polluting, it could push
up power tariffs. The new tax would provide more funds for renewable energy
initiative, whose share in total power mix is dismal,” an official source
told. Carbon tax should not be standalone initiative and there was a need
for introducing a system of emission trading in order to avoid problems in
the country’s negotiating position on climate change. Most EU countries
have a system of penalizing polluting industries, forcing them to buy carbon
credits fro efficient industries. India proposes to add 78.577 mw of additional
power generating capacity during the 11th Plan. Around 70 per cent of the
capacity would come from the thermal sector. The gross installed capacity
of grid interactive renewable power in the country is active renewable power
in the country is active renewable power in the country is estimated at 11.273
mw, 8% of the total installed generation capacity in the country.
According to a recent United Nations Environmental Programme (UNEP) report,
Global trends in sustainable energy investments, the country saw a sharp increase
in deployment of renewable energy in 2007s with an installed capacity of 11.4
gw of renewable energy. With 7.8 gw of wind power installed in the country,
wind energy seems to be drawing most of the investments. The UNEP report sys
that in 2007, public market activity was marked by a series of foreign currency
convertible bond (FCCB) issues from established renewable energy companies.
While Suzlon raised $300 million in May and a further $200 million in September,
Moser Baer picked up $15 million in solar energy. Indowind raised $47 million
and Webel $16.8 million in 2007, the report says.
The trend is interesting considering that Indian companies did not raise money on domestic stock exchanges in 2006 for investment in renewable energy. According to Indian Renewable Energy Development Agency (Ireda) chairman & managing director Debashish investors in unsteady markets by providing a fixed return. Till 2007, convertible bonds were not issued by Indian renewable companies.