	The PLF considered for the project activity is very low. The PLF stated in the TNERC order is 27.46%.  Why the PP haven’t considered the PLF as given in the TNERC order. Looking into the TNERC recent order with Capacity wise and pass wise PLF, the PLF taken for investment analysis is highly underrated. DOE is requested to examine this carefully and without any impartiality.
	Since O&M contract is signed for most of the WEGS and all the maintenance related activities are covered by the service providers themselves, PP is requested to provide the rationale behind taking the administrative cost. This is just to decrease the IRR I guess.
	It is a well known fact that the wind projects are mainly installed considering CDM revenues and offsetting of tax liability of the company as a result of accelerated depreciation of 80%.
	Benchmark calculation is not as per WACC tool (EB53 Annex 8)
	The selection of option for calculating OM is not adequately documented with justification. CEA calculation is based on net electricity generation, the average efficiency of each power unit and the fuel types used in each power unit. 
	Percentage of Escalation in O&M Charges in Each Year is not adequately justified, DOE has to check.
	The justification of negligible project emissions for wind project is not as per AMS. I. D ver 16.0 EB 54). 

A casual look at the PDD will reveal this project is non-additional.

The generation assumed is 14.222 mn. units for an installed capacity of 7.2 MW. The PLF works out to 22.5%. TNERC has recommended PLF of 27.15%. DOE should check PLF proposed by other projects located in Tirunelveli District and should not go blindly by the third party estimation of PLF as this is one of the most undependable documents. All wind power projects in Tirunelveli district assume and achieve PLF of more than 28% and hence PLF less than 28% should not be accepted.

Project cost of Rs.59.4 mn./MW for a 600 KW configuration is very high. Recently some PDDs have been webhosted with much lesser cost. DOE should go by Purchase order and not by offer letter, as offer letter is another undependable document

DOE should not go merely by PP’s words that the project is financed by equity fully. Besides getting declaration from PP duly certified by chartered accountant, DOE should also go through the Annual Reports of the company for 1009-10 and 2010-11 and ensure that no additional loans have been drawn /taken. Financing pattern plays an important role in additionality. 

In case DOE comes to know that the project is part financed by loan, then equity IRR should not be accepted as no bank will use equity IRR to assess the project. It should be only project IRR. Many PPs use equity IRR because they can fix a higher benchmark. This is not according to step 2(b) of Additionality Tool

O&M cost for 600 KW windmills is never Rs.8 lakhs/windmill. It does not cross Rs.6.5 to maximum Rs.7 lakhs. DOE should check the O&M agreement before accepting this cost. PDD does not give free O&M period. Normally manufacturers give atleast 1 year free O&M and in quite a few cases, they have given 2 to 3 years. DOE should go by O&M agreement and not by offer because VVM states that no evidence should be overlooked if it affects additionality.

PDD says, “The Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligation) Regulations, 20105 and the TNERC Order on Pooled Cost of Power Purchase by TANGEDCO6 (wherein the pooled cost for power purchase of Rs. 2.37 per kWh has been specified) was referred to and used in the investment analysis”. The crux is why the project should assume pooled cost of Rs.2.37/kWh when the TNERC has recommended a tariff of Rs.3.39/kWh for power supplied to grid. Over and above this, income from REC should be taken into account. In case, PP wants to use the pooled cost, then the total tariff including REC sale should not be less thanRs.4.89 (Rs.3.39 + 1.50)

Depreciation for wind power project is 100% and not 80% as given. These projects are also eligible for additional depreciation (in the first year) which the PP and consultant have ignored.

Escalation in insurance premium is something new.  Normally insurance premium remains either constant or comes down, for well known reasons. The escalation is neither correct nor appropriate

In Tamil Nadu, the land is free hold and lease hold, unlike in Maharashtra, Rajasthan or Gujarat. Hence, land lease charges or escalation in land lease charges cannot arise. If DOE goes through other Tamil Nadu projects it will realize that whatever PP /consultant claims are incorrect, though the amount is minor.

TNERC order provides for only O&M cost and insurance. It does not provide for administrative expenses. When the windmill is looked after by the O&M contractor from security to billing, where is the question of administrative expenses?  This should not be allowed.

TNERC has recommended only about 14% post tax return and the PP has considered a benchmark of 17.75%. If the PP claims that this is the minimum return expected to set up this project, then the project does not conform to guidelines. It should be rejected as non-additional. The beta has been calculated based on 60 months observations. Does the PP know what happens to beat when a long period is taken into account? Further, the PP has combined beta calculated for varying durations to arrive at average. Whether any author approves of this approach? Naturally the beta in this case if more than 1, while the beta of power companies is much less than 1. PP did not give the detailed results, which is not correct as the Guidelines for completing PDD requires all input parameters and assumptions should be given transparently. DOE did not even check this!

If the tax savings due to 100% depreciation, tax holiday, correct PLF and tariff are taken into account, the project will be non-additional. DOE should not allow the PP to modify or add any input parameters other than what is given in this PDD. If this is done, the project will be non-additional