Commissioning time brought down for solar power projects

The government has reduced the time allowed for commissioning and financial closure of solar power projects, a move that could accelerate the pace of renewable energy capacity addition in the country. This, however, could be a concern for project developers as pressure of acquisition of land and availability of transmission infrastructure continues to mount. 

In amendments to the tariff-based competitive bidding guidelines for solar projects, the ministry of new and renewable energy (MNRE) said the timeline for commissioning of solar projects in a solar park and outside of it will be 15 and 18 months, respectively, against the previous timeline of 21and 24 months. 

This, however, is not the first instance of the government tweaking timelines for project commissioning. 

The initial timeline for commissioning of solar projects was up to 13 months, which was relaxed post industry’s demand. Following the latest amendments, project developers complained that such frequent changes to the bidding guidelines create uncertainty in the market. “We feel that this is sufficient time for commissioning of solar projects. 

Land is not an issue when a project is being built inside a solar park. This will help us adding project capacity at a faster pace,” an official told ET on condition of anonymity. 

The solar power developers association (SPDA), in a letter dated January 8, had requested MNRE to allow 24 months for commissioning of central transmission utility (CTU)-connected projects, as the process of getting connectivity from the CTU requires substantial time. 

The changes in bidding guidelines, issued only a day after SPDA’s communication, were made without stakeholder consultation. SPDA in the letter said these changes would bring “much wider participation, with lower tariffs” in solar tenders. 

The amended guidelines also call for attainment of financial closure of projects being set up inside a solar park to be brought down to nine months, against 12 months allowed previously. 

SPDA in its recommendation said the financial closure of the projects be allowed before the date of commissioning of projects, while developers may be allowed to provide self-declaration on possession of land, connectivity, and sources of funds utilised for the implementation of the project. 

MNRE’s guidelines would not help project developers at a time when the issue of acquisition and conversion of land is more pressing than ever, experts say. 

“From the private sector point of view it is pretty unhelpful because there are already delays across the spectrum as we see and land and transmission are getting more and more difficult by the day,” said Vinay Rustagi, managing director at Bridge to India, a renewable energy consultancy. 

“There have been several instances in the past where developers have asked for relaxation of timelines from the government where land approvals are taking time, or transmission is not available,” Rustagi added. 

source@the economic times