Land Acquisition, Infra Stay Major Barriers to Timely Completion of Wind Projects: CARE Report

Even as the revisions have been made to bidding procedures for wind projects in India, land acquisition and evacuation infrastructure will endure to remain key barriers for timely completion of such projects, according to a report. The government made positive modifications to the bidding guidelines for wind projects to fast-track installation of such energy projects in the country.

As per the modifications, now the timeline for land acquisition for wind power projects has been extended from seven months to scheduled commissioning date i.e. 18 months.

This, the government believed, will help wind power project developers in states where land acquisition takes longer time.

In a statement, rating agency Care Ratings supposed, "The revised bidding guidelines which allows wind power developers to acquire land on or before scheduled commercial date (SCD) i.e. 18 months, revise declared capacity utilisation factor (CUF) once within first three years of commercial operation date (COD) and incentivise early project completion would bode well for the wind energy sector.

"Care Ratings added that "it opines that the new amendments will benefit wind project developers. However, land acquisition and evacuation infrastructure continue to remain major impediments for timely completion of wind projects."

The revisions, the government had alleged, intended not only to reduce the investment risks related to the land acquisition and CUF but also to provide incentives for early part commissioning of project.

The risk of wind power developers in case of delay in signing of PSA has been mitigated by starting time-line of execution of project from date of signing of PPA or PSA, whichever is later, the government said.

Care Ratings believed, "Although, new guidelines would provide enough time to acquire land, any significant delay in land acquisition till the SCD would leave little head room in terms of timelines for project execution unless significant delay in execution of PPA or PSA itself."