Solar projects facing procedural delays in India

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At least thirty solar project developers have decided to file a petition before the state electricity regulator to seek extension of the current tariff regime. Developers of close to 450 MW of solar projects fear of their investments of Rs 67.5 billion becoming unviable as they are not in a position to commission their capacities before December, a deadline set by the Gujarat Electricity Regulatory Commission (GERC). They have already roped in a legal expert for ‘mass-petitions’.

Recently, representatives of Moser Baer, Lanco, Kiran Energy, GMR, Sun Edison and Emco met at Ahmedabad Management Association to decide the future course of action for the struggling solar project developers. Developers will get tariff of Rs 15 per unit for the first 12 years and Rs 5 per unit from 13th to 25th year for solar power units based on PV technology. Majority of the developers are expected to miss deadline in December. GUVNL will impose penalty per day on the projects to be commissioned after the deadline. Also, the late project developers will get less return in new tariff regime, which is expected to come in place from January 2012. It is learnt that developers will plead before the GERC to extend the deadline till March end and implement new tariff regime from April 1, 2012.

Developers will contend that late allocation of land besides other procedural issues resulted in delays of their project. Some of the developers are claiming that they were asked to change their location twice or thrice in the state promoted Solar Park. Earlier, the government Gujarat owned Gujarat Urja Vikas Nigam Limited inked long term power purchase agreements with over 83 developers to commission 950 MW of solar projects in the state. However, only 250-300 MW of projects will be commissioned before the deadline.

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