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Penalties to be imposed on the Solar Power Developers in Gujarat, India

Thursday, March 10, 2011 Leave a Comment

The recent news from Bloomberg desk came as a pleasant surprise to me. According to Bloomberg, Gujarat government (an Indian state) is planning to penalize the companies who are running behind their schedules for solar project implementation. Currently, around five of six project planned to be commissioned by 2011 are in time overrun stage (approximately 48.5 MW capacity). A senior executive from GEDA has said that "There will be some penalty".
This can act as a fine example of how central government can also impose similar penalties on companies who readily sign on Power Purchase Agreements (PPAs) but don't initiate the action plan. According to the PPA, each company has to pay penalties for delays
·        10,000 rupees ($222) a day per megawatt for the first 60 days
·        15,000 rupees thereafter
All said and done, the question arises "Is the monetary penalties an only solution?" Also, "what can be learnt from these project glitches?"
I am taking to a couple of industry experts on these issues. I will update this post on the same.


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