Wind developers who won projects in Solar Corporation of India’s (SECI) 2000 mw auction in February, but have not been able to achieve financial closure yet, are likely to get a breather, with SECI extending the last date for closure by another two months. SECI had earlier set the deadline for January 3, after which it had threatened to start invoking the bank guarantees the developers have given.
Developers who wanted to set up their wind projects in Gujarat were facing this problem since the Gujarat government has been reluctant to allot land for central government sanctioned projects. About half the total capacity of 2000 mw auctioned was intended for Gujarat, which has some of the best wind energy producing sites in the country.
Following SECI’s directive setting the January 3 deadline, wind industry bodies, IWTMA (Indian Wind Turbine Manufacturers Association) and WIPPA (Wind Independent Power Producers Association) last week wrote a letter to the power minister requesting him to intervene immediately to get land in Gujarat leased to them. According to multiple sources close to the development, SECI has now allowed an extension, though the main problem of getting the land still needs to be sorted out.
But this gives a reprieve to IPPs from potential penalty as well. “A proposal for an extension has been sent to the ministry,” a SECI official confirmed. The ministry of new and renewable energy (MNRE) could not be reached for comments.
SECI projects would be connected to the interstate transmission system (ISTS) and could thereby supply power anywhere in the country. The Gujarat government has preferred to lease land only for wind projects auctioned by its own renewable energy agency, Gujarat Urja Vikas Nigam Ltd (GUVNL), whose power would be provided to Gujarat alone. With the growth of wind projects, premium wind sites in Gujarat are becoming increasingly scarce.
A senior Gujarat official dealing with the issue said a solution would be reached whereby both the state and SECI would benefit. “We are of course keen on promoting renewable energy,” he said to ET.
The affected wind developers could certainly lease private land for their projects, but are disinclined to do so, as it is much more expensive than state land. Developers have bid competitive tariffs and don’t want to buy private land as it would raise their costs.
SECI has held wind auctions even after the one in February, and many of the subsequent winners are also keen to set up projects in Gujarat are facing the same problem. 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 Gujarat problem is only one of the many facing the wind industry. “SECI extending the deadline is good news,” said a developer who was amongst the winners of a recent SECI wind auction. “But the real issue is that many projects are also half built, in which thousands of crores have been collectively invested by the industry. These assets are lying unproductive because we can’t commission the project.”
“There is revenue loss happening because the high wind season is for a limited period. The ministry needs to understand what the true economics of the project are, and therefore solve the real problem rather than create artificial problems and then celebrate by solving these artificial problems,” he said, on the condition of anonymity.