HPCL wind power plans hit a roadblock

HPCL wind power plans hit a roadblock

Hindustan Petroleum Corp. Ltd’s (HPCL) plans to set up a wind power generation facility in Maharashtra in an effort to benefit from tax incentives for companies investing in such facilities has suffered a setback due to opposition from farmers in Dhule, where the company wanted to set up the project.

While the company has already commissioned a 12.5MW capacity in the state, its plan to double this to 25MW, scheduled for July this year, has been delayed.

“The farmers are not allowing for the additional capacity to be set up there. The project has already been delayed," said a a senior executive at HPCL who did not wish to be identified.

HPCL plans to eventually commission 100MW of wind power capacity at an investment of Rs500 crore. The state-owned firm ended 2006-07 with revenues of Rs74,044 crore and has a 20% share in the oil refining and marketing business in the country.

HPCL’s decision to invest in wind power was prompted by incentives including depreciation and tax waivers offered by the government. Companies that produce clean energy are also entitled to carbon credits.

“It was never a very critical area for the company. It is tough for public sector units to get into new business areas. Wind power may be one of the things that may not work out for them (HPCL)," said a Mumbai-based oil sector analyst, who did not wish to be identified.

Wind power accounts for less than 5% of the 135,000MW of India’s installed power generation capacity. Although India has a wind energy potential of 45,000MW, its installed wind power capacity is only 6,280MW. The ministry of non-conventional energy resources hopes to increase this three-fold to around 18,000MW by 2012. Other energy firms such as NTPC Ltd, Indian Oil Corp. Ltd, Oil and Natural Gas Corp. Ltd (ONGC) and Bharat Petroleum Corp. Ltd have similar plans. Analysts say this helps such companies diversify into another energy source and also entails them to carbon credits and tax breaks.