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Bombay High Court directs regulator to consult wind developers on wind zones dispute
The Bombay High Court has thrown the ball back at Maharashtra’s power regulator and the state electricity distributor in their dispute with developers over the reclassification of wind zones.
Following a petition filed by Hero Wind Energy challenging an order passed by the Maharashtra Electricity Regulatory Commission on the matter in July, the court directed the Maharashtra State Electricity Distribution Co. Ltd. to submit its proposal to reclassify wind zones before the regulator again and ensure that the developers are heard before a decision is taken.
Wind energy projects work only in areas where wind speeds are above a basic minimum. In Maharashtra, the regulator had classified the state’s wind projects according to their locations in 2010 and reaffirmed them with modifications in 2015.
Areas with the lowest wind speeds were classified in Zone 1 and those in places with the highest speeds in Zone 4. The regulations set the estimated capacity utilisation factor (CUF) of the projects as 22% for Zone 1, 25% for Zone 2, 30% for Zone 3 and 32% for Zone 4. The feed-in tariff for power from projects in each zone was set in inverse proportion to wind speed.
The state distributor wants to reclassify wind projects according to their CUF alone. In a study, it found that 42 of the 328 projects in Zone 1 areas had CUFs higher than 22% and concluded that these developers were drawing undue profit from the relatively higher tariff set for Zone 1 projects.
However, the affected developers maintained that they increased their CUFs by improving efficiencies – installing taller towers and bigger rotors for their turbines – and should not be penalised. They said the power purchase agreements (PPAs) signed are valid for 13 years.
“The government cannot retrospectively change the clauses in any PPA on some pretext or the other. The discom is arm-twisting developers to get lower tariffs by reopening PPAs,” said Sunil Jain, CEO of Hero.
The discom’s first petition before the regulator for a review of the 2010 classification was rejected in April, but its review plea was approved in July. The views of wind developers were not sought at both hearings held by the regulator.
The high court ruled that the regulator’s July order “does not have any finality” and that if the discom wants to apportion any extra benefit to consumers, it would have to file a separate petition before the regulator, which should decide on the petition only after giving “due opportunity” to developers to present their case.