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No land for wind projects as Solar Corporation of India demands financial closure
Wind energy developers who won projects in Gujarat are in a bind because they have been asked to achieve financial closure by January 3 but the state is not leasing them any land.
The projects were won by companies in Solar Corporation of India’s (SECI) auction of 2,000 MW of projects in April this year. SECI has now asked for quick financial closure.
This is impossible, the Indian Wind Turbine Manufacturers Association (IWTMA) and the Wind Independent Power Producers Association (WIPPA) have together written to the minister for new and renewable energy (MNRE) R K Singh and sought a meeting with him.
SECI has threatened to invoke the developers’ bank guarantees if the deadline is not met. “Requisite documentary evidence regarding financial closure (which was scheduled for December 24, 2018) is not submitted,” SECI’s letter to the concerned developers reads. “You may submit all relevant documents on or before January 3. Non compliance of the same may attract action as per the provisions … of the PPA.”
The industry bodies said in their letter that after the award of contracts, project developers approached the government of Gujarat for leasing of land. “The project developers were given to understand that the state government has taken a call not to provide land in Gujarat for projects that have executed PPAs with SECI,” the joint letter says.
With a scarcity of sites that have adequate wind speed in Gujarat, the state government decided some months ago that it will lease land solely for projects supplying power to its own utility, Gujarat Urja Vikas Nigam Ltd, and not for central projects, whose power can be supplied anywhere in the country through the interstate transmission system (ISTS).
“We are keen to have an amicable solution to the issue, but SECI should have first consulted the state as to whether we can give land or not,” said a senior Gujarat government functionary dealing with the issue. “We want the entire sector to develop. It is in the overall benefit of the state and the country, so we will allot the land.” But he did not disclose any further details about what solution the state government had in mind.
SECI’s 2,000 MW wind auction in April left it to developers to decide where they wanted to locate their projects. Since the best wind energy sites are available mostly in Gujarat and Tamil Nadu, most of the winners sought to set up projects in Gujarat. SECI has since conducted another 2,000 MW wind auction in June, followed by a 1,200 MW auction in September, many of whose winners too are keen on Gujarat-based sites. Of the total of 7,000 MW of wind projects auctioned by SECI this year, around 3,500 MW are expected to be in Gujarat.
The IWTMA and WIPPA letter notes that SECI was aware of the problem since some meetings relating to the matter have already been held. “Despite your instructions and support, the issuance of notices by SECI shows its indifference to the situation on ground and to the interactions you had with the industry,” the letter says.
An SECI official said it was only following protocol. “They have made a representation and we will see if we can consider an extension,” he said.
“We hope that the issue will be resolved. Our project is stuck,” said one of the winning developers. He noted that private land in the Kutch area, where wind projects are largely located, was scarce, and hence leasing such land was not a viable alternative. But another developer disagreed. “It is not that private land is not available,” he said. “It’s just that it’s much more expensive. The developers have bid at competitive rates and hence want state land to keep their costs down.”