February 2019

Editor Dolly Khattar

Land availability is the most important prerequisite for any utility-scale solar or wind power project. While the country has abundant land resources, it is becoming increasingly difficult and expensive to acquire it, be it government land or private.

Project developers that were allocated capacities under SECI’s Tranche III, Tranche IV and Tranche V wind tenders have been awaiting the Gujarat government’s approval for land leases since March 2018. In Karnataka, solar power developers still reportedly face hurdles in converting agricultural land to industrial. Land acquisition has become problematic even on the fringes of the Thar Desert, in Bhadla, leading to protracted development delays.

To overcome this hurdle, long-term leasing agreements were introduced some years ago. Most parks developed by nodal government agencies identify low-yield land and lease it from the farmers on 25 to 28 year agreements. However, leasing land is not an easy task given the associated political and socio-economic challenges.

Even in cases where the leased land has low agricultural yield, farmers are left feeling dissatisfied.
Take the instance of the Pavagada Solar Park where, after having agreed to lease their land for 25 years, some farmers claim they have been exploited and have had to give away their land at very low rates. These farmers are now left with uncertainty regarding the future of their land, even as the lease expires.

Meanwhile, developers claim that they are being penalised for no fault of theirs. Land constraints are not only delaying project development, and thereby leading to penalties, but also increasing capital costs. There have been several instances where developers had to pay huge compensation from their pockets for getting encroachments vacated.

Besides, there are other issues such as unorganised land records, lack of contiguous stretches of land and non-uniform regulatory procedures for land conversion, procurement and leasing across states. All these issues have made land acquisition for solar and wind projects a tricky affair.

Serious interventions are needed at the policy, technical and socio-economic levels to address stakeholder issues and resolve the long-standing “land conundrum”.

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