BENGALURU: Gujarat, which has been a leading state in generating renewable energy, is going slow in leasing land for wind projects auctioned by central agencies, and allowing only the ones backed by its own utility, which makes it difficult to meet deadlines, developers said.
This is because sites where wind speeds are good enough for projects are becoming scarce in the state. Developers fear that projects other than those backed by Gujarat Urja Vikas Nigam Ltd (GUVNL) would be delayed by at least six months if the state government continued with this policy.
Most of the wind projects auctioned this year have been by MNRE’s nodal agency, Solar Energy Corporation of India (SECI), where developers have the option to set up projects anywhere in the country. The majority of winners were hoping to locate their projects in Gujarat because it is the best wind energy producing state in the country besides Tamil Nadu.
Sources said Gujarat decided to re-examine their land allocation policy around seven months ago for bids conducted outside the state. “They have still to decide what the new policy should be. It is not approved and hence the delay,” said a developer who was among the winners at a recent SECI auction. “Of the 12 months usually allowed to achieve financial closure, if seven-eight months are taken up in just getting the land, it will not be possible to achieve either financial closure within the given deadline, or commission the project by the subsequent deadline.”
Email queries to Gujarat’s state nodal agency for implementing renewable energy projects, Gujarat Energy DevelopmentNSE 4.88 % Agency (GEDA), remained unanswered at the time of going to press. The principal secretary for energy, Department of Energy and Petrochemicals, Gujarat, declined comment.
Another industry source said there was another reason for the Gujarat government’s reluctance to give land for central wind projects. “The state government wants to get cheaper power and eventually wants to do trading itself,” he said, requesting anonymity. “It feels all of the state’s high yielding land is going to SECI projects.” About 7,000 MW of wind projects were auctioned by SECI this year, of which half are expected to be set up in Gujarat. “This essentially means that 15,000 acres are gone. That’s where the problem starts. Land is not a replaceable resource,” he said.
However, another source felt Gujarat was justified in its stance. “Developers can always buy or lease private land,” he said. “They are upset because they were expecting state land, which is a lot cheaper than private land. The state is not being unfair.”
MNRE secretary Anand Kumar raised the matter with J N Singh, chief secretary of Gujarat, on August 7. “It has been reported by various wind developers that GEDA has stopped performing the work connected to wind power projects except those of Gujarat government,” the letter said. Kumar also referred to a previous letter dated July 25 from the revenue department of Gujarat to the district collectors of the state that said applications received for allotment of land for windmills would be processed only for wind projects bid through the state discom. “These two decisions have sent wrong signals for development of renewable energy in the state,” Kumar said.
Sources say despite many meetings held between developers, the state and MNRE over the past several months, the situation remains unchanged. According to another winning developer, Gujarat has given in principal approval but is still refusing to allot land. “This in my mind is something that isn’t going to go away in a hurry. Now, if they end up holding these allocations, our project commissioning will be delayed by at least six months. All projects will,” the developer said.
SECI did not respond to queries.
The wind industry feels it reflects poorly on the state. “It isn’t about SECI giving an extension to our project, no developer will want to set up projects in Gujarat anymore,” said a developer. “This is where ease of business comes in – on one hand the central government is bidding, on the other the state won’t allocate land,” another source said. The general view was that the state and central governments did not appear to be working in sync with each other.
Only eight states in India have wind speeds high enough to produce wind energy. The best sites are mostly located in Gujarat and Tamil Nadu.