Wind Developers Get an Additional Three-Month Extension to Commission Projects
The extension was granted considering the second COVID-19 surge and monsoon disruptions
The Ministry of New and Renewable Energy (MNRE) has issued an order granting an additional time extension of up to three months in the scheduled commissioning date for wind power projects with power purchase agreements (PPAs) signed before June 15, 2021.
The ministry specified that the extension might be considered on a case-to-case basis after due diligence and careful consideration of the case’s specific circumstances. The order also includes wind power projects for which the wind turbine generators have been ordered before June 15, 2021.
This will be in addition to the extension of two and half months previously granted for projects with commissioning dates between April 1 and June 15, 2021.
The Ministry noted that the step had been taken after receiving various representations from the wind industry requesting an additional time extension for wind power projects as a special case, considering supply chain disruption due to the second Covid -19 surge followed by monsoon-related disruptions.
The manufacturing of wind turbines requires a large number of components. Also, installing a wind turbine requires the transportation of heavy and large components such as nacelle, tower, and blades and the movement of construction machinery at the site. The broad disruption period considered by MNRE during the second Covid-19 surge ended on June 15, 2021.
In May last year, MNRE had issued a notification that renewable energy projects with commissioning dates on or after April 1, 2021, could claim extension owing to the second surge of the Covid-19 pandemic. MNRE had, however, cautioned developers that the time extension should not be used as a ground for the termination of the power purchase agreement or claiming any increase in the project cost, including interest during construction or upward revision of the tariff.
As per the recently released data by MNRE, the wind capacity additions declined 58% YoY in the fourth quarter (Q4) of 2021 with 212 MW, compared to 500 MW in 2020. Quarter-over-quarter wind installations also fell by 45% compared to 384 MW installed in Q3 2021.
Early last year, MNRE had issued a notification denying requests for another five-month extension for commissioning renewable energy projects, stating that these extensions would not be granted in a routine manner going forward. The MNRE said it had received requests for another five-month extension for renewable projects commissioning on top of its previous five-month extension between March 25, 2020, and August 24, 2020, amid the COVID-19 induced lockdown. When this request was denied, the first COVID-19 surge saw a decline across the country.
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