Project developers in Gujarat campaign for deadline extension

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Over 30 Indian developers have filed petitions with the Gujarat Electricity Regulatory Commission (GERC) to extend the commissioning deadline for solar projects.

The developers, which have already committed to building projects totalling 450MW and signed power purchase agreements (PPAs) for said systems, are looking for a six-month extension to the deadline set by the state government for commissioning. Among those petitioning are Tata Power Renewable Energy, GMR Gujarat Solar Power and the Solar Energy Association of Gujarat.

During the hearing with the GERC, developers raised various issues pertaining to the cost of land acquisition and the basic infrastructure facilities, before filing petitions regarding an extension of the control period of Solar Tariff order No.2, dated January 29, 2010. A further hearing on the matter will take place on January 7, allowing additional companies to air their grievances.

“They [solar developers] want six months extension in the control period. They raised several issues of land acquisition including increased jantri rates, which made land acquisition costly. The hearing will continue on January 7 as some more companies are still to make their points,” GERC chairman PK Mishra said.

At the initial hearing, Senior Supreme Court lawyer MG Ramchandran, who represented the state government of Gujarat and state power distribution agency, Gujarat Urja Vikas Nigam Limited (GUVNL), declined to allow any extension in the control period to the solar developers.

However, developers are adamant that they are deserving of a deadline extension due to the fluctuating market conditions. “There were infrastructure related limitations and also the land prices witnessed sharp increase since we signed the PPAs with the government as the jantri rates revised upwards. This makes it difficult to commission a solar project, for which land cost holds significant share in the total cost of project,” an official from one leading company said.

In light of the petitions, the state power regulator has proposed a new tariff structure for developers that commission plants in the state during the period between January 29 and March 31, 2015. The new structure excludes solar power projects, for which PPAs have already been signed.

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