Clean En­ergy Cess Col­lec­tions Rise, but Spend­ing Low

Govt’s col­lec­tions likely to touch over ₹ 54kcr, but only 17% has been spent

The Economic Times - - Companies & Economy - De­b­joy.Sen­gupta @times­group.com

Kolkata: The gov­ern­ment’s col­lec­tions from the clean en­vi­ron­ment cess im­posed on coal, lig­nite and peat in 2010 are likely to touch ₹ 54,336 crore by March, ac­cord­ing to a fi­nance min­istry doc­u­ment.

How­ever, only ₹ 9,021 crore, or about 17% of the ex­pected to­tal, has been spent through the Na­tional Clean En­ergy Fund (NCEF) to which ₹ 25,810 crore has been trans­ferred from the amount col­lected.

The spend­ing falls short of the es­ti­mated ₹ 34,811crore needed to sub­sidise some 55 re­new­able en­ergy projects, as rec­om­mended by an in­ter-min­is­te­rial group. Funds from the cess are routed through the NCEF to fi­nance and pro­mote clean en­ergy ini­tia­tives and re­search & de­vel­op­ment. The in­ter-min­is­te­rial group de­cides how the money is to be used.

Ac­cord­ing to a gov­ern­ment state­ment, about ₹ 9,021 crore has been spent through NCEF al­though ₹ 17,500 crore has been al­lo­cated to var­i­ous min­istries over the years. About ₹ 12,400 crore was al­lot­ted to the Min­istry of New & Re­new­able En­ergy, while some ₹ 3,500 crore has pro­vided to the Min­istry of Wa­ter Re­sources, River De­vel­op­ment and Ganga Re­ju­ve­na­tion. The gov­ern­ment in­tro­duced the clean en­ergy cess in 2010 with a levy of ₹ 50 on ev­ery tonne of coal sold. This was in­creased to ₹ 100 per tonne in 201415, ₹ 200 per tonne in 2015-16 and ₹ 400 per tonne this fi­nan­cial year. The gov­ern­ment col­lec- ted ₹ 12,600 crore from the cess in 2015-16 and is ex­pected to gar­ner ₹ 26,148 crore in 2016-17. An in­dus­try ex­ec­u­tive said with re­new­able en­ergy costs de­clin­ing, there may no longer be a need for sub­sidy, known as vi­a­bil­ity gap fund­ing, for such projects. The gov­ern­ment had also planned to of­fer in­cen­tives to power dis­tri­bu­tion com­pa­nies to pur­chase so­lar and wind en­ergy.

“How­ever, a very small por­tion of the fund found its way into fund­ing these projects. Now with tar­iffs for so­lar and wind power gen­er­a­tion de­clin­ing, the re­quire­ment of vi­a­bil­ity gap fund­ing for these projects are los­ing rel­e­vance,” said the se­nior re­new­able en­ergy in­dus­try ex­ec­u­tive.

“The gov­ern­ment, there­fore, needs to de­velop suit­able mech­a­nisms to en­cour­age dis­coms to buy re­new­able power and con­sider a mech­a­nism for mak­ing timely pay­ments,” he said. Pro­cure­ment-based in­cen­tives can help bridge the dif­fer­ence be­tween the cost of re­new­able power gen­er­a­tion and av­er­age power pur­chase cost, said an­other ex­ec­u­tive.

Spend­ing falls short of the es­ti­mated 34,811 crore needed to sub­sidise some 55 re­new­able en­ergy projects

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