Even as it rolls out sops for companies setting up renewable energy projects in the state, the Maharashtra government has inserted a mandatory clause on ‘social responsibility’ in its new policy on renewable energy.
Accordingly, all entities setting up renewable energy projects, barring wind and solar power plants, will have to compulsorily set aside two per cent of their profit to be given to the local gram panchayat for development works in the villages where the projects are located. This will include all co-generation, hydro and biomass projects, which officials say tend to have a disruptive impact on the local village in some form or the other.
After providing for water supply schemes, health, education services and so on in the village, the companies in charge of the projects are expected to do the same for villages in the vicinity.
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A senior official from the state energy department who did not wish to be named said, “Combustion takes place for energy production through bagasse-based cogeneration and biomass, and there is some impact on the surroundings. These projects, even small hydro projects, also require the cooperation of local villages. So, we decided to make it compulsory for these projects to give back to the village.”
The official said the clause was optional for solar and wind energy projects as they are clean in nature with no disruptive impact. “Also, we are not promoting wind energy projects to a large extent and the benefits offered to such projects are limited. For solar, the production is decentralised with panels and not limited to one particular location as in the case of bagasse and biomass-based production.”
The policy also says companies establishing plants to produce power from cogeneration, industrial and agriculture residue and small hydro projects should employ local villagers for 80 per cent of their unskilled workers requirement and 50 per cent of the skilled or semi-skilled requirement.
The state government has set a target of adding 14,400 megawatt installed capacity of renewable energy in Maharashtra over the next five years, over and above the existing capacity of nearly 6,700 megawatt. Over 50 per cent, 7,500 megawatt, is expected to come from solar, and 5,000 megawatt from wind energy of which 3,000 will be for sale outside the state. Another 1,000 megawatt is expected from bagasse-based cogeneration, 400 megawatt from small hydro projects, 300 megawatt through agricultural residue and 200 megawatt from industrial residue.
Among the incentives offered, the state government will provide open access for these projects to sell energy directly to a third party. It will waive the electricity cess for ten years. Small hydro and biomass-based projects can avail of a financial aid of up to Rs 1 crore from the government’s green energy fund to set up the requisite transmission and distribution infrastructure. These projects will also get capital grants of up to Rs 1 crore. Certain co-generation projects have also been made eligible for a subsidy on sugarcane purchase tax.
Vishwas Pathak, adviser to State Energy Minister Chandrashekhar Bawankule, said, “While the Maharashtra government had studied the renewable energy policies of other states, the social responsibility feature is a peculiarity of our state’s policy. Even for wind and solar energy projects, normally the proponents are big corporate entities and already perform activities under corporate social responsibility.”
Pathak said the government’s social responsibility clause will now ensure that even smaller companies and co-operatives give back to the village. “The companies should not have a problem in complying with the mandate. The government is giving them many incentives as well as preferential tariff,” he said.
However, firms already in the business of power generation through non-conventional means, especially bagasse-based cogeneration, think that giving 2 percent of their profits to the gram panchayats may not be financially viable.