Shocker! Gujarat Deliberately Delaying Land Transfers for Wind Projects

Potentially making holes in its own targets for the Renewable energy, leading RE producer Gujarat has slowed down the process of leasing land for wind projects that were auctioned by government agencies. According to media sources, the Gujarat government reportedly is favoring those companies that are backed by its own state utility, making it difficult to meet the deadlines for the others.

Anonymous sources reported by the Economics Times were quoted saying “The state government wants to get cheaper power and eventually wants to do trading itself,” he said, “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.

Other sources also requesting anonymity added that 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.”

Many wind developers say that this will reflect badly for the state even if the nodal agency gives extensions for the completion of the wind projects in Gujarat. “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 to ET. “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.

MNRE secretary Anand Kumar had earlier raised this matter with J N Singh, chief secretary of Gujarat, on August 7 through a letter. “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.

The problem has arisen since two states in India out of the eight, Tamil Nadu and Gujarat, have the best sites with enough wind speeds to produce wind energy commercially. While India has set a 30 Gigawatt offshore wind energy target by 2030, Gujarat plans to tap 10,000MWe of its wind potential along the coastal areas of Saurashtra and Kachh. The state has a Renewable energy target of 8800 MW of wind energy for the year 2022.

But recent actions of the state bodies show that this target might be missed if they continue to work with a bias against other non-state companies. This especially will not bode well with larger MNCs which have so far pulled down the cost of RE in India. With Delays, cost of completion, as well as commissioning, also rises. Time wasted on these will also put the country’s overall performance to fall on International platforms, as other states will be tempted to do same.