Six Month Moratorium to Renewable Generators Can Bring Huge Relief: ReNew Interview
ReNew Power’s President also stressed on the need for structural reforms in the power sector
The global coronavirus crisis has disrupted production processes and supply chains across sectors, and the solar industry is no exception. In India, the lockdown is still in place, and social distancing restrictions are a part of everyday life. The pandemic has also taken a massive toll, with the majority of the country’s workforce rendered jobless because of the restrictions in place.
Companies and establishments are left with no choice but to adapt to these changes and find a way to continue operations while minimizing losses. They have come up with innovative ways to face these challenges while trying to reduce the spread of the deadly virus.
Mercom interviewed Col. Pushkar Prasad, President at ReNew Power, a leading independent power producer (IPP), to find out how the company has been coping with the crisis and about its planned course of action going forward. Here are the edited excerpts from the interview:
The COVID-19 crisis has resulted in an unprecedented impact on lives and livelihood across the globe. It has forced everyone to relook at the accepted conventions of social behavior, like the accepted normal behavior of congregating at a workplace – what we refer to as “going to the office’. Instead, the ‘new normal’ is working from home and maintaining social distance.
Fortunately, at ReNew Power, we were quick to react and respond to the unfolding situation in front of us. Our business continuity plans kicked in the first week of March when we divided teams into two working groups. By the middle of March, all employees at the corporate office were asked to work from home. To keep our sites functioning, site teams were split into two teams with one team based at the site at one time. Maintaining site presence was critical because we needed to ensure the continued supply of power to the grid.
Before the lockdown was imposed, arrangements were made at offices to adhere to the government’s guidelines, and the option to work from home was given to employees.
Post the implementation, arrangements were made at sites for beds, dry ration arrangements were made so that the food was not in short supply, and recreational games were provided at the facility; some had chess while a few had carom to help employees cope with the lockdown. Additionally,
- Daily thermal screenings were carried out at the facility, and the health of all employees was monitored.
- At some sites, the original equipment manufacturer (OEM) partners were accommodated.
- State leaders made calls to families every day, informing them of the well-being of their family members and just conversing on some occasions.
- Once there was clarity on movement restrictions, the teams were divided into two batches, and separate teams worked on separate days, even the vehicles were different for site staff.
- All social distancing norms, as well as necessary precautions, were taken to ensure the safety of staff coming to work at sites. Rules were strictly followed on the sites to ensure complete compliance of various guidelines.
- Staff had daily calls with senior leadership on their challenges at the facility; the motivation levels were high, and in fact, it boosted the camaraderie at the facility.
- From town hall meetings to morning Zumba and yoga sessions, we have tried to ensure that life remains as close to normal as possible for our employees under the lockdown. Through online debates, quizzes, and weekend talent shows, we have kept in touch with each other and ensured ReNew employees were constantly engaged. Brown bag sessions by domain experts and online courses have helped employees to upgrade their skills and acquire domain knowledge during the lockdown.
- A well-structured engagement program has helped our employees stay positive, informed, and enabled them to contribute their best under tough circumstances.
ReNew Power is following all government directives on the lockdown. We have already set our plans rolling on how to ensure full precaution and social distancing for our employees, as the lockdown restrictions are lifted gradually. We are in touch with local authorities of our sites and are planning for a phased reopening of our corporate office and facilities with social distancing measures as prescribed by the competent authorities in the state.
The government of India has recently announced a ₹900 billion (~$11.98 billion) liquidity infusion into distribution companies (DISCOMs), which will improve their health substantially. Liquidity infusion will breathe fresh life into the power sector and protect DISCOMs from going bankrupt. The money can help them repay most of the outstanding that they owe to power generators, restarting the virtuous cycle of liquidity, higher investment, and rapid growth for the sector.
Additionally, the government has also announced its intention to privatize DISCOMs in union territories and indicated early implementation of the national tariff policy. This may also be an opportune time for the government to convince states to expedite distribution sector reforms so that distribution companies don’t need a bailout next time and can become financially viable entities. These three combined, if implemented properly, can be the biggest boost to the sector in the longest period.
The government has taken many critical steps like infusing liquidity into the sector, providing moratoriums on project completion, early implementation of the national tariff policy, and starting the crucial work on privatizing DISCOMs in the country. These are far-reaching measures and will go a long way in getting the power sector back in shape.
The industry is waiting for the amendments in the Electricity Act to pass through Parliament and also some clarity on the future duty structure, including the government’s plans on safeguard duty and the basic customs duty announced in this year’s budget.
What will bring immediate relief to many renewable energy companies is a six-month moratorium on the completion of new projects as even after the lockdown is lifted, it will take some time to get labor and construction equipment back on the sites.
The power sector is an essential service, and we have continued to function during this period. We are ensuring that we continue to bid for projects, use the cash judiciously, and keep all our employees safe and healthy.
The COVID-19 pandemic has created an unprecedented impact on the Indian economy and will make it challenging to achieve the country’s ambitious renewable energy target. The under-construction projects are likely to face a delay of many months. In addition, we are staring at a fall in economic growth, which may affect electricity demand in the near term.
But I believe that with the government’s stimulus package in place, the country’s economy may help us see a revival from the third quarter onwards. If the government can top this with structural reforms in the generation and distribution space, the power sector can be out of the woods soon.
Nithin Thomas is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.