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NEW ENERGY POLICY INSTILLS INSECURITY IN SMALL FIRMS

A few notable amends have been made to the land policy for Renewable Energy in Gujarat , many of which have put small scale developers in a tough spot. Gujarat is a favored destination of wind developers with high speed winds available, especially in the Kutch area.

The new policy does not make possession of a PPA mandatory while applying for a land to set up a project in the State. Without such provisions, land could get locked up by some developers, thereby denying others a chance to set up wind power project.

Additionally, all future renewable projects are to be built in parks identified by the State.

The criteria for applying for land within the park is that, developers are to have either a manufacturing base in the state or a minimum operating capacity of 250 MW. Following this policy, new and/or small sized developers with no record of operating capacity or manufacturing base in the State, will not be able to set up any units.

The non-essential status of PPA enables land brokers buy pieces of lands having good wind sites, and sell them for the price they deem fit. Even though the policy states that 50% of the land should be developed within the first 5 years and 100% of the land should be developed within 10 years, scope of misuse still exist.

While many developers have sent application to lease land, some of them even proposed to construct projects up to 10,000 MW (maximum limit specified as per policy) even without having any projects planned for the same.

A lease of Rs 15000/hectare is applicable at the time of taking possession.

The smaller IPPs complained that the larger developers would lock the best resources for themselves thereby driving the small developers to states like Andhra Pradesh and Karnataka which would cost them more, in turn raising the wind power tariffs, whereas the more prominent IPPs stated that Gujarat wants to encourage large players to build large plants which alone would provide a larger scale, thereby bringing down the cost and hence the tariffs.

While this decision might protect the state’s interests, it might end up not benefiting the nation as a whole.

 

As excerpted from Economic Times

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