Given this is an environmental issue, there is no reason the government—the Centre and the two states—should not pick up the tab.
Replacing overhead power cables with underground ones where possible—in the habitat of the Great Indian Bustard (GIB)—might prove to be costly for solar power producers, but the protecting the environment must be accorded top priority. Development must be sustainable and the Supreme Court (SC) is right in directing Gujarat and Rajasthan to no longer permit overhead power lines or allow more windmills to be set up within the habitat; nor are the states to put up infrastructure for solar power.
Moreover, pending the switch to underground powerlines—this needs to be done in a year—they must put up diverters. This is no doubt a big blow to renewable players, but one lakh birds cannot be allowed to die every year; in the three years to 2020, six GIBs have died in the Thar alone. The Wildlife Institute of India is of the view that that if the collisions with the wires are not prevented soon, the GIB, which numbers a mere 150, would soon become extinct.
Some players have pointed out that underground cabling may not be possible, but the court cites a report by PowerGrid Corporation to note that 220 KV underground power lines are in fact being laid in India. However, acknowledging that laying these high-voltage cables underground would require technical expertise, the court has set up an expert committee.
While the developers fear they will need to bear the cost of converting the overhead cables to underground ones wherever feasible, and that the expenses could run into thousands of crores, the court has observed the state—Rajasthan and Gujarat— governments should bear the cost with help from the Union government, under relevant schemes or by allocating funds for the purpose.
The court has referred to the Compensatory Afforestation Fund Act, noting that the Rajasthan government already allows use of its funds for improving wildlife habitat. It believes there are sufficient resources—with the states and the Centre—that can be tapped.
To be sure, the power generators too may be required to bear additional costs and, in such cases, and the court has left it open to determine how such costs can be mitigated. It has suggested some resources could be mobilised from CSR allocations since, under the law, these can also be utilised to safeguard the environment. In earlier cases, the courts have observed, it would be permissible to pass on a portion of the expenses to the ultimate consumers, subject to the approval of the relevant regulatory authority.
Given this is an environmental issue, there is no reason the government—the Centre and the two states—should not pick up the tab. However, if the power producers are asked to incur some part of the expenditure, they could use their CSR allocations and fund some of it from their regular capex allocation. While media reports suggest they will seek a review, it seems unlike the SC will rule otherwise.