Procedure for capacity allocation of wind

power projects in Karnataka:

1. Earlier, once in 3 months, KREDL is to release the

advertisement in the leading newspapers inviting
applications for establishment of wind farms at the notified
sites. But at present it is not being adopted. Because the
identified capacity has already been allotted to the
applicants. Only new site have to be explored. Therefore,
applications for development of any self identified sites on
first come – first serve basis are considered through out the
year. Applicants may obtain the standard application form
either from KREDL or download it from the KREDL website..
2. The filled-in application form along with a feasibility report
enclosing Rs.30,000/- per MW demand draft drawn in favor
of MD, KREDL, payable in Banglore to be furnished to
KREDL.
3. A specially constituted committee scrutinises of the
applications in-order to judge the financial capability,
technical viability and as well the preparedness of the
developer. If necessitates, the applicant is given an
opportunity to appear before the committee and appraise
the committee of his interest and capability to execute the
project.
4. Based on the recommendations of the committee
Government. Sanctions the capacity for setting up wind
farms.
 5. Energy Department also receives “the applications for
seeking capacity allocation directly and place in the
allotment committee headed by the Principal Secretary,
Energy Department after verification of the site by KREDL.
Allotment GO’s are issued accordingly.
6. Memorandum of Understanding (MOU): The applicant to
whom capacity allocation is approved is expected to sign an
agreement with the Government. The agreement sets out
the terms and conditions under which the development is
allowed to take place Applicants have to pay DPR scrutiny
charges @ Rs. 25,000 per MW to KREDL along with a non-
refundable fee of Rs.5000 per MW before signing the
agreement( now this fee is collected along with the
application itself).
7. The cost per MW varies from Rs. 4 to 5 crores per MW. The
applicant has to submit a feasibility report for the project
they wish to apply for, along with evidence of their capacity
to raise the minimum equity of 11% of the project cost.
8. Developers have to prepare a Detailed Project Report by
engaging the wind energy consultants /specialists and
obtain the required statutory clearances from various
agencies and submit the same to KREDL. KREDL, in-turn will
send the scrutiny report to Government for the issue of
NOC.
Developers shall execute the project only after the receipt of NOC
from the Government.
 On the other hand, the applicants may have the wind
power projects under the project transfer policy of Govt.
of Karnataka and is detailed as below:

1. As per the norms, any applicant holding wind power

capacity/project is allowed to transfer the project or its part
capacity to any interested party upon paying the statutory fees of
Rs.75, 000/- per MW to KREDL and on submission of mutually
agreed letters to KREDL followed by the details of the company in
the standard form be furnished.
2. Accordingly, KREDL send its recommendations to
Government for approval of the transfer of wind power
capacity/project.
3. Upon the approval of the Government, the applicant is
required to comply the other conditions detailed as above in the
serial No. 6, 7 & 8.

The Policy Environment

The State Government has enunciated forward looking
polices to encourage rapid development of Non-
conventional energy projects. The following
elements are common for the entire renewable energy
sector.
1. Wheeling and banking facility: Karnataka Power
Transmission Corporation Limited (KPTCL) allows
banking of electricity generated by all renewable
energy power projects. A banking charge amounting
to 2% of the month-end balance of energy banked
is levied. Wheeling of energy is at 5% of the
energy wheeled for the self-consumption whereas
5% of the energy wheeled plus with a surcharge of
 Rs.1.15ps/kWh is applicable in case of 3rd party
sale as per the KERC order.
2. Purchase price for power: KPTCL is purchasing
power from renewable energy projects at Rs. 3.40
per unit without any annual escalation valid for
the period of 10 years.
3. Third party sale of power: KPTCL allows the sale
of power to third party.
4. Electricity tax*: Electricity tax is exempted for
a period of 5 years for captive consumption of
power generated.
5. Entry tax exemption*: Windmills and its parts and
accessories are exempted.
6. Deemed industry status*: Non-conventional energy
projects have been given the status of industry
under Sec. 109 of Land Reforms Act for the
purpose of acquiring lands through Karnataka
Industrial Areas Development Board.
7. Green projects status*: Wind and small hydro
projects have been accorded green projects status
under the Water (Prevention and Control of
Pollution) Act, 1974 and the Air (Prevention and
Control of Pollution) Act, 1981 respectively.
8. Lease and sub-lease of Government. Lands;
The forest and Revenue, Irrigation department
lands are being government lands and are released
to KREDL on behalf of the respective developer
and KREDL in turn–subleases the same either to
the developer or their end parties. The period of
lease is generally 30 years. But it is extendable
to another 20 years depending on the condition of
the project.
9. In case of small hydro Government of Karnataka
has exempted water royalty up to 25 MW.
*Need cross Verification with concerned department.