Renewable energy projects worth Rs 30,000 crore are being implemented in Madhya Pradesh, which have quietly reached out to companies and attracted GE, Reliance Power, Spanish wind major Gamesa and others, giving tough competition to Gujarat in the sector.
The buzz of activity has catapulted the state to the top slot of renewable energy in the country where Narendra Modi’s Gujarat was hailed as the most successful state in the sector. MP’s Chief Minister Shivraj Singh Chauhan has accelerated the state’s drive for renewable energy, helping it expand rapidly and kickstart many projects, including 4,600 mw of being executed, state government officials said.
The state invited proposals in November 2012, seeking investments to the tune of Rs 10,000 crore, with the full backing of Chauhan. “The chief minister gave us a blank cheque and complete support to go ahead with our plan to develop renewable energy in the state.
The idea was to set a plan in place and first see the results on the ground rather publicise just a policy on paper,” said S R Mohanty, secretary, new and renewable energy department, Madhya Pradesh. The state has made things easy for investors.
To set up a wind project, the developer has to just submit a resource assessment report of any site in the state. It applies for solar, bio and hydel as well, where if the selected site is government’s land, the developer gets it for the life of the project i.e. 25 years.
In case of private land, the government facilitates the acquisition. Finding a good site and getting clearance for it is a major hassle in the wind sector. So when the land is made available by the government, it simplifies the whole process. The state’s policy, no doubt is simple and transparent,” said Sunil Jain, managing director, Hero Future Energies.
Hero has 208 mw of wind and 50 mw of solar power project underway in the state. While there is a National Solar Mission at the central level, state policies on solar power are quite ambiguous, the only exception was Gujarat.
The Modi-ruled state was an early mover in the sector even before the PM announced the national solar mission. In 2010, Gujarat signed around 88 solar power purchase agreements with 75 developers for 25 years with tariff as high as Rs 12.54 per unit without competitive bidding. But Gujarat backtracked on the tariff last year as tariffs of new projects fell to half of Gujarat’s rates, compelling the state to appeal to apex electricity regulator for revision in tariff.
Gujarat has an installed capacity of 852 mw in solar and 3,114 mw in wind as on March 2013. MP however has given developers much more freedom to sell power. They can sell outside the state; take the national solar mission or renewable energy certificate route, or sign a PPA. Sanjay Chakrabarti, partner & cleantech sector leader at Ernst & Young said MP is the new Gujarat for renewable power producers.
“In the last one year, maximum addition in renewable based power capacity has happened in MP. More than the policy, it’s the strict execution and political stability that has helped invite investments in the state,” he said.
“Gujarat had an ambitious feedin tariff policy while MP has a bigger focus on projects not getting feed-in tariff. For such projects, the efficiency rate in MP is higher as there is government support in getting clearances, choice of sale of power and transmission infrastructure,” said Bharat Bhushan Agrawal, senior analyst (solar) at Bloomberg New Energy Finance. Sumant Sinha, founder and CEO of Renew Power said that MP could become an interesting state for investment in renewable.