India’s Large Solar Plants Exempted From Environmental Licensing

India exempted developers of large solar-thermal power plants from environmental-permit requirements, potentially easing construction delays for companies such as Reliance Power Ltd. (RPWR) and Lanco Infratech Ltd. (LANCI)

The country’s State Pollution Control Boards should not demand permits for such plants, the Environment Ministry said in a website statement. Developers must still demonstrate that they’re not using protected land and have applied for water permits, according to the statement.

The decision is aimed at preventing delays that have hampered planning applications in other energy and mining industries. India is investing in solar projects as economic growth boosts power consumption and the government seeks to bring electricity to remote areas with no access to the grid.

Each solar-thermal plant needs about 125 hectares (309 acres) of land, more than eight times the requirement for a typical photovoltaic project in India, according to the Forum for the Advancement of Solar Thermal industry group, or FAST. Photovoltaic plants use panels to turn sunlight directly into power; thermal stations use sunlight to heat liquids that produce steam for generators.

India’s solar industry, still in its infancy, is seeking to avoid the obstacles faced by mining companies including Coal India Ltd., which said in October it may miss output targets in 2011 and 2012 because of delays in obtaining environmental clearances.

2013 Deadline

The country has so far issued licenses for seven solar- thermal plants, totaling 770 megawatts of capacity. Developers need to start ordering turbines and other equipment to meet a March 2013 deadline for commissioning, FAST Chief Operating Officer Vijay Lakhanpal said in an e-mail.

Companies may forfeit bank guarantees of 208 million rupees ($4.7 million) to 1.8 billion rupees in the event of delays to commissioning, according to government regulations. Publicly traded companies that won licenses for the seven solar projects include Reliance Power, Lanco and Godawari Power & Ispat Ltd.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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