Wind developers who had previously won projects in the solar auction of 2000MW by SECI in the month of February, are not able to achieve financial closure yet. But the latest moves have made them a bit relaxed as SECI has extended the closure date for two more 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.
The developers who were willing to setup their wind projects in Gujarat were facing this problem as Gujarat government has been reluctant to allot land for central government sanctioned projects. Almost half the total capacity of 2000MW auctioned was intended for Gujarat, as Gujarat has some of the best wind energy producing sites in the Country.
Following SECI’s directive setting the January 3 deadline, wind industry bodies like IWTMA [Indian Wind Turbine Manufacturers Association] and WIPPA [Wind Independent Power Producers Association] last week has written a letter to the power minister, requesting him to intervene immediately to get land in Gujarat leased to them. According to various sources close to the development, SECI has now allowed an extension, though the main problem of getting the land still needs to be sorted.
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 within the Country. But the Gujarat government prefers to lease land only for the wind projects auctioned by its own renewable energy agency, Gujarat Urja Vikas Nigam Ltd (GUVNL), the generated power would be provided to Gujarat all alone. With the growth of wind projects, premium wind sites in Gujarat are becoming increasingly scarce.
A senior Gujarat official dealing with the issue suggested a solution would be attained where both the state and SECI would benefit. We are 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 more expensive than state land. Developers have bid competitive tariffs and are not willing to buy private land as it would raise their costs.
SECI had held many wind auction after February and many subsequent winners are willing to setup the projects in Gujarat are facing the same problem. From the total of 7,000MW of wind projects auctioned by SECI this year, around 3,500MW 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 cant 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.