Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 137
Offshore Wind Worldwide 2023
of generation requested by the offtaker
or load despatch centre. 34 Such compensation would not only be payable if the
back-down has been requested on account
of considerations of grid security or safety
of equipment and personnel or such other
extraneous conditions. The exclusions from
generation compensation would be articulated in the bid documents and the PPAs.
4.3 Onshore grid congestions,
prioritization of renewable energy
resources and compensation
mechanisms
As indicated above, wind power projects
have been accorded ‘must run’ status and as
such would be prioritized over conventional
power. Additionally, various State Electricity
Regulatory Commissions have specified
renewable purchase obligations ("RPO")
on distribution utilities stipulating that a
minimum percentage of total consumption
should be derived from renewable sources.
However, note that there is no priority allocation between various renewable power
options and as such it is possible for the
RPO requirements to be fulfilled through
the purchase of potentially cheaper sources
such as solar or onshore wind. That being
said, note our responses above on the scheme for generation compensation in case of
back-down and the exclusions to the same.
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5. REAL ESTATE
5.1 Rights over land to be secured
With respect to offshore/seabed rights,
the MNRE has released its draft rules for
offshore wind energy leases but the same is
yet to be finalised and notified. 35 Broadly, the
draft rules provide for lease of areas within
the EEZ of India to developers who have
been awarded offshore projects through
the ICB process. Areas under lease as per the
draft released would range from 100-500
square kilometres and the lease period
would be five years for planning and exploring activities and 30-year concession terms.
The Offshore Wind Policy is not clear as to
the scope of land acquisition or rights that
would have to be secured by developers on
onshore or nearshore land. However, the
Draft Tender released indicates that acquisition of land near the seacoast, if required
would be the sole responsibility of the
developer. However, this should be clarified
at a policy-level.
The complexity in arranging for acquisition
or right of way access would depend to a
large extent on the nature of land over which
such acquisition or access as applicable is
required—for instance, if any land is designated as eco-sensitive or forest land or tribal
land etc.
5.2 Costs and risk of legal challenges
Insofar as offshore leases are concerned,
given that the lease would be granted by the
34 Ministry of Power, Government of India, Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Wind
Power Projects (8 December 2017).
35 Supra note 10.
