MNRE Writes to SECI About Extensions for Wind Projects Affected by Land Policy Changes

Land procurement has been a persistent issue for the development of renewable projects

November 4, 2019

/ Wind

The Ministry of New and Renewable Energy (MNRE) has written to the Solar Energy Corporation of India Limited (SECI) about granting an extension to wind projects (tranches 1 to V) that have been affected by changes in land policies.

This extension is “subject to the condition that the application for land allotment should have been made within 30 days of the effective date of the power purchase agreement (PPA),” the MNRE has clarified.

The ministry has stated that in situations where the applications for land allotment were made after 30 days from the effective date of the PPA, then the delay would be deducted from the total relief.

According to  MNRE, in cases where the private land acquisition was affected on account of the modifications in land and building rules such as in the state of Tamil Nadu, an extension in the scheduled commissioning date of the projects may be granted for a period of six months.

The extensions will be for those projects whose PPAs have been signed not more than seven months before February 4, 2019, which is the date when the Land and Buildings Rules were issued.

As per the MNRE’s direction, an extension in the scheduled commissioning of the project which is normally for 60 days following the operationalization of LTA (long-term agreement), may be considered by SECI. This will give additional time to the developer to complete the work once the inter-state transmission system (ISTS) infrastructure is ready.

If there’s an overlapping of periods due to the extensions given for different reasons covering the same period, then double benefit (another extension) will not be granted to the projects.

If the project is partly commissioned, the land for the capacity being commissioned needs to be shown by the wind power generator (WPG) before the announcement of the commissioning of the part capacity.

In cases where the scheduled commissioning dates of the projects are extended based on the above reasons, the full commissioning milestone will be extended accordingly, considering that the project commissioning is the ultimate target. Further, any delay in commissioning beyond the extended commissioning will be dealt with as per the provisions of the request for selection (RfS) and PPA.

The MNRE has also stated that SECI may examine each representation for the grant of extension and provide relief accordingly.

An extension for a period taken by the ministry of defence for giving its clearance from the day of making the application minus 60 days may also be considered, the ministry has added. This is subject to the condition that the no-objection certificate should have been applied within 30 days of the PPA. In case it is done after 30 days, the delay period will be duly deducted from the total relief to be provided.

Meanwhile, several wind tenders floated by SECI in the recent past have not attracted the anticipated interest from developers.

Recently, SECI issued an amendment revising the tariff ceiling for a 1,200 MW wind tender.

Also, it’s important to note here that in September 2019, the MNRE issued procedural guidelines for the dispute resolution mechanism (DRM) which will be applicable to projects being implemented through SECI or National Thermal Power Corporation (NTPC).

In the past, Mercom has written about how land is one of the biggest impediments for the expansion of renewable energy projects, especially solar.

Image credit: Umptanum at English Wikipedia [Public domain]