MNRE Orders Setting Up of Dispute Resolution Committee for Solar and Wind Sectors

The disputes between developers, SECI and NTPC, are expected to be resolved by this committee


The Ministry of New and Renewable Energy (MNRE) has issued an order to establish a system to resolve disputes between solar and wind energy developers and the Solar Energy Corporation of India (SECI) or the National Thermal Power Corporation (NTPC).

The solar and wind power developers had been requesting the MNRE to set up a dispute resolution mechanism to sort out the numerous issues that are both within and outside the scope of contractual agreements.

The disputes under consideration are usually between the developers and SECI and NTPC. After thorough consideration, the MNRE has agreed to setup an independent, transparent, and unbiased Dispute Resolution Committee (DRC).

Upon thorough scrutiny of the various problems, the government has charted a framework for the setting up of a DRC for the resolution of these issues. As per the framework, the committee will comprise of three distinguished members and will be set up with the approval of the minister of the MNRE. The upper age limit for DRC members is 70 years. The members of the DRC will be selected from the Delhi NCR region and will not have any conflict of interest in any way. The DRC will assist in the resolution of conflicts in solar and wind projects, programs, and those that are being implemented by SECI or NTPC.

The DRC will be handling cases pertaining mostly to time request extensions along with various other common issues being faced. These would be cases wherein time extension decisions by SECI are challenged based on contract terms.

All cases of appeal against the decisions given by SECI on the extension of time requests appeal to extend timelines based on unforeseen circumstances such as natural calamities, extension in connectivity, and delays in handing over the land by solar developers will be dealt with by the agreements of the contracts.

Under these circumstances, the solar and wind power developers are required to make an application for grant of Extension of Time (EoT) within the stipulated time as listed in the contract. Any breach in terms of the contract or if applications are not filed within the contractually stated period, the SECI or NTPC can reject the application.

Accepted applications will be accurately reviewed, and decisions will be made within 21 days after the application date. In case a developer does not accept the decision by SECI or NTPC, then a plea can be made to the DRC within 21 days of the SECI or NTPC order being filed. The developer will incur a fee in this case, which will be set by the DRC. The fee will have to be more than at least 5% of the impact of the decision being challenged and will have to be deposited into the payment security fund of SECI or NTPC for the project under consideration.

In case time extensions are unpredictable and not covered under the terms of the contract, the DRC upon consultation with the MNRE will arrive at an appropriate decision. Such unexpected situations usually arise if there is a delay in the land being allocated to the developer due to various reasons.

After reviewing all cases, the DRC will submit its recommendations to the MNRE within 21 days of the reference date. The DRC’s suggestions combined with the MNRE’s review will be put forth before the ministry, and it will examine these recommendations and send them to the minister. DRC members will be paid ₹4,000 (~$57)/sitting fees and not exceeding ₹20,000(~286)/member per case to be paid by SECI or NTPC. The DRC meetings will be conducted on the premises of SECI and NTPC.

The ministry will examine and send such recommendations to the minister with the comments of IFD within 21 days of the receipt of a recommendation from the DRC. The DRC can interact with the various parties involved in the dispute without the lawyers.

The Indian solar market has grown from a 3 GW installed capacity in 2014 to 30 GW in 2019. With the rapid expansion of solar and wind sectors, the disputes involving the stakeholders have also increased. Besides domestic disputes, India’s solar and wind sectors have also been embroiled in a series of trade disputes, as was reported by Mercom last year.

Ramya Ranganath is an Associate Editor and Writer for Mercom Communications India. Before joining Mercom, Ramya worked as a Senior Editor at a digital media supply chain solutions company. Throughout her career, she has developed end-to-end content for various companies in a wide range of domains, including renewables. Ramya holds a bachelor’s degree in Mechanical Engineering from M.S. Ramaiah Institute of Technology and is passionate about environmental issues and permaculture.