MNRE Amends Guidelines for Dispute Resolution Mechanism for Wind and Solar Developers

The dispute resolution committee deals with cases of appeal against the decisions given by SECI or NTPC


The Ministry of New and Renewable Energy (MNRE) has amended the order related to the Dispute Resolution Mechanism to resolve disputes between solar, wind developers, and the Solar Energy Corporation of India (SECI) or the National Thermal Power Corporation (NTPC).

The developers had requested the MNRE to set up a dispute resolution mechanism to solve the issues that are both within and outside the scope of contractual agreements.

In June 2019, the MNRE had issued an order to establish a system to resolve disputes between solar and wind energy developers. In September, the MNRE released the blueprint for the dispute resolution committee. This committee is responsible for considering all kinds of cases of appeal against the decisions given by SECI or NTPC.

The committee has been formed to deal with cases pertaining mostly to time request extensions along with various other common issues. These would be cases wherein time extension decisions by SECI are challenged based on contract terms.

According to the MNRE, all requests for extension of time due to force majeure events such as flood, earthquake, and other natural calamities, will be dealt as per the contractual agreements. In this amendment, the ministry has tried to clarify further the clauses relating to the grant of time extension for projects affected by two or more unforeseeable circumstances.

Earlier, the MNRE had stated that in case of an extension of a time dispute, the fee payable would be 5% of the performance bank guarantee for the project in question. A minimum fee of ₹100,000 (~$1,406.72) would be payable even if 5% of the guarantee is less than ₹100,000 (~$1,406). Now, the MNRE has clarified that this amount can, in no case, exceed ₹10 million (~$140,672).

Recently, it was reported that the MNRE wrote to SECI about granting an extension to wind projects (tranches 1 to V) that have been affected by changes in land policies.

Image credit: Sunsights


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