Firms to pay price for delay

Firms to pay price for delay

Power companies may get awards for implementing projects early

The State government has revised the fee structure for Non-Conventional Energy projects and introduced a fee for extension of time for completion of projects.
Besides, the State government has decided to collect Rs five lakh per mega watt as security deposit from the company at the time of inking the project development agreement.

If the company fails to complete the project in time, the company will forfeit all these fees.

The Government has also introduced an incentive and award scheme for timely completion of projects.
The State Energy Department will give a cash prize of Rs 1 lakh per megawatt, to the company that commissions the Non-Conventional Energy project as per the agreement. The department will also issue a certificate of appreciation to the company.
As per revised fee structure that has come into effect from August 27, the existing fee for applying for a Non-Conventional Energy project, transfer and processing the detailed project report (DPR), has been doubled.
For instance, the application fee has gone up from Rs 5,000 to Rs 10,000. The DPR processing fee has been hiked to Rs 50,000 from Rs 25,000. All these fees are fixed per mega watt.

According to Managing Director of Karnataka Renewable Energy Development Limited H G Shivanandamurthy, “This is streamlining the system, and not tightening the procedure. The fee structure was fixed in 1999, and it was not revised since then. Private companies were taking advantage of this. Several companies got permission for Non-Conventional Energy projects several years ago, but they have not implemented them. We only want to regulate companies and stop misuse by revising the fee structure.”

NCE projects
The Government has accorded sanction to at least 1,000 companies to start various Non-Conventional Energy projects across the State over the last decade.
But so far, only 50 per cent of them have started work. The rest have just blocked the sites for renewable energy projects for more than five years. Site blocking has occurred mainly in wind and hydro projects, Shivanandamurthy pointed out.

Time extension
Hitherto, there was no need for a company to seek time extension after expiry of the term as stipulated in the agreement, nor was there a fee for it.
Now, a flat rate of Rs 1 lakh per MW per year has been fixed for time extension for all kinds of Non-Conventional Energy projects.
Time extension will be granted up to four years and after that, the Government will reserve the right to cancel the project.

In fact, this is the reason why the State has been generating only 2,400 MW from NCE sources though the total capacity is 18,000 MW.
“We have set a target of increasing generation to 4,200 MW in the next five years. Every year, around 800 MW will be added,” Shivanandamurthy said.

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