Centre allows time extension for solar projects facing supply disruption

Supply chain disruption due to Corona to be considered Force Majeure

Solar power projects which are likely to get delayed due to supply chain disruption in China would now be allowed time extension.

The ministry of new and renewable energy in a notice on Friday said any delay due to spread of Coronavirus (Covid-19) and its subsequent impact on the supply chain would be considered an event under ‘Force Majeure Clause’ and would be eligible for time extension in the commissioning.

“All Renewable Energy implementing agencies of the Ministry of New & Renewable Energy (MNRE) are hereby directed to treat delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country, as Force Majeure,” MNRE said in a public notice.

Force Majeure clause in the supply or project commissioning clause pertains to the events and circumstances that are beyond the control of humans. The clause does not excuse a party's non-performance entirely, but only suspends it for the duration of the FM. 

More than 85 percent solar power generation capacity in India is built on imported solarpanels, from China. India’s current solar power capacity stands at 31.9GW andit is aiming for 100GW by 2022. India’s import of solar cells stood at $1.4 billion in the current financialyear up to November, 2019.

MNRE in its notice has directed all solar power project developers who wish to claim for force majeure clause would have to submit formal application to SECI /NTPC or any other implementing agencies, giving all documentary evidence(s) in support of their claim.

“While considering the requests for grant of extension of time, SECl/NTPC/any other implementing agency may fully satisfy itself that the claimants were actually affected due to disruption of the supply chains due to spread of coronavirus in China or any other country in the period for which extension of time has been claimed,” the notice.

MNRE also asked the renewable energy departments of states to treat delay on account of disruption of the supply chains due to spread of coronavirus in China or any other country, as Force Majeure and issue their own instructions on the subject.