Covid-19 impact: Centre gives 5-month extension to renewable projects

RE Projects hit by Covid, supply chain disruption can claim Force Majeure

Solar power projects delayed due to Covid-19-induced lockdown and disruption in supply chain from China have been granted five-month extension in their commissioning deadline. This comes in the wake of several renewable power developers cancelling their contracts, citing Covid-19.

The Ministry of New and Renewable Energy (MNRE) in a notice on Thursday said all renewable energy implementing age­ncies will treat lockdown due to Covid-19 as ‘force majeure’. The time period stipulated by the MNRE is March 25 to August 24 for all renewable energy projects under implementation as of March 25. 

“…This blanket extension, if invoked by the renewable energy developers, will be given without case-by-case examination and no documents/evidence will be asked for such extension,” said the notice by the MNRE. 

The ‘force majeure’ clause in the supply or project commissioning clause pertains to events and circumstances beyond human control. The clau­se does not excuse a party’s non-performance ent­irely, but only suspends it for the duration of the ‘force majeure’. 

In March, the MNRE had granted blanket approval saying any project facing delay due to Covid-19 can apply for extension under the ‘force majeure’ clause. Several renewable power developers have applied for cancellation of projects, citing the pandemic as reason. 

ACME Solar, ReNew Power, and Mytrah En­ergy (India) have petitioned in the Central Elect­ri­city Regu­latory Com­mi­ssion for cancellation of pro­j­ects, citing delay due to Co­vid-19 and ab­s­ence of tran­smis­sion network.

The MNRE, in its latest notice, said all intermediate milestones of a project would be extended within the time frame provided. “The developers may also pass on the benefit of such time extension, by way of granting similar time extensions, to other stakeholders down the value chain like engineering procurement construction contractors, material, equipment suppliers, original equipment ma­nuf­acturers, etc,” said the notice.

More than 85 per cent solar power generation capacity in India is built on imported solar panels from China. India’s current solar power capacity stands at 31.9 gigawatt (Gw) and it is aiming for 100 Gw by 2022. India’s import of solar cells stood at $1.4 billion in the current financial year up to November 2019.