Renewable Projects Under Development During Lockdown Get Five-Month Extension
Developers can pass on this benefit to other stakeholders in the value chain
The Ministry of New and Renewable Energy (MNRE) has issued a notification saying that all under-development renewable projects as on the date of the lockdown would be given an extension of five months. The extension would apply from March 25, 2020, to August 24, 2020.
If invoked by renewable developers, this blanket extension will be given without a case to case examination, and no evidence will be required for the grant of such an extension.
The ministry noted that all renewable energy implementing agencies would treat lockdown to arrest the COVID-19 pandemic as ‘force majeure.’
According to the latest notification, the timelines for the immediate milestones of a project would also be extended within the extended time provided for commissioning.
The project developers who would be granted the extension can also pass the benefit of such extension to other stakeholders like engineering, procurement, and construction (EPC) contractors, equipment suppliers, and original equipment manufacturers, among others.
The ministry further added that the state renewable energy departments should also treat the lockdown as a force majeure event and consider granting appropriate time extensions.
Commenting on the extension, Pinaki Bhattacharyya, co-founder and CEO at Amp Energy India, said,
“This is a positive move by the MNRE and showcases their intent of helping the sector tide over these tough times by providing the developers sufficient extension timelines. Having said that, the government should not impose more trade barriers after extending safeguard such as basic customs duty. The power costs have already gone up, and any additional duty will further increase the cost of power for consumers and this would not a great move given the current situation”.
The MNRE had earlier issued a blanket commissioning time extension for all renewable energy projects under construction in the country amounting to the total period of the lockdown plus 30 days. Later it also clarified that the lockdown period will be considered from March 25, 2020, to May 31, 2020. The stakeholders however, believed that the 30 days’ extension is insufficient.
Mercom India Research had also reported in its newly-released Q2 2020 India Solar Market Update that solar project construction activity had come to a standstill as the coronavirus pandemic disrupted every aspect of the economy. Labor availability was one of the biggest challenges for large-scale projects. With monsoons setting in, it could take until Q4 for the activity to pick up. Considering the realities on the ground, Mercom suggested that the industry needs more than the 30-day extension post-lockdown period currently granted by the government for project commissioning.
Recently, the Ministry of Power decided to extend the scheduled commercial operation date (SCoD) of the interstate power transmission projects that were under construction on the date of the lockdown. The government decided to grant an extension of five months for these projects.
Update: This article has been updated with a quote.