New Delhi: Renewable energy projects scheduled to be commissioned on or after 28 February can avail a four-month extension to their respective scheduled commissioning dates, a government advisory showed. The advisory noted that the relevant agencies can provide force majeure relief for the projects in view of supply-chain challenges triggered by the West Asia war.
The provision will protect clean energy developers from the risk of penalties—including encashment of bank guarantees, payment of daily extension fees, other financial compensation or reduction in contracted tariffs—for missing their project completion deadlines.
The advisory, issued on 21 August by the ministry of new and renewable energy (MNRE), was addressed to renewable energy implementation agencies (REIAs) such as Solar Energy Corp. of India, NHPC, NTPC and SJVN, as well as state chief secretaries, the ministry of power, the Central Electricity Authority (CEA) and the Central Electricity Regulatory Commission (CERC).
The relief was rolled out after the MNRE received representations from the renewable energy industry seeking blanket extension of timelines for projects affected by the West Asia war that began on 28 February.
Mint could not independently ascertain the number or names of specific projects that will benefit from this waiver.
In July, the MNRE had suggested that the REIAs may look at providing relief to affected projects.
The ministry said that the standard bidding guidelines for procurement of renewable power—solar, wind, hybrid, firm and dispatchable renewable energy (FDRE)—issued under Section 63 of the Electricity Act, 2003, provide that power purchase agreements (PPAs) shall contain provisions with regard to force majeure definitions, exclusions, applicability and available relief as per industry standards. Generally, force majeure clauses in PPAs include “war”.
The department of expenditure, under the ministry of finance, clarified in April that the West Asia situation should be treated as war and provided for a time-extension of up to four months.
While sector players generally welcomed the move, some also expressed hope for larger relief.
“MNRE’s advisory is a welcome step and timely measure that will provide greater certainty to renewable energy developers,” Pinaki Bhattacharyya, founder, managing director and chief executive officer of renewable energy developer Ampin Energy Transition, said. “The time extension will help protect project viability and manage supply-chain risks.”
Sanjeev Aggarwal, founder and executive chairman, Hexa Climate, welcomed the extension but said what mattered more was a request to the ministry of power, CTUIL (Central Transmission Utility of India Ltd) and CERC to keep the ISTS waiver and connectivity in place for the extended period.
“A commissioning extension without the waiver moving with it is relief only on paper,” Aggarwal said. “This advisory gets the instinct right—now it needs the ministry of power, CTUIL and CERC to actually issue those orders.”
To support green energy adoption, the government earlier offered full waiver of ISTS charges for projects commissioned before 1 July 2025 for a period of 25 years. Despite requests for extension, the government put in place a mechanism to end the relief by June 2028.
As per the policy, renewable energy developers that were able to complete their projects on or before 30 June 2026 were offered a 75% waiver in ISTS charges for 25 years. Those who commission their projects by 30 June 2028 will be given a 25% waiver in ISTS charges for the same duration. However, projects that remain incomplete beyond 30 June 2028 will not get any waiver.
The latest development comes at a time when prices of key solar components, including raw materials like copper, have increased due to the war.
According to experts, project cost may increase up to 20% due to the rise in raw material prices and implementation of the approved list of models and manufacturers (ALMM) for cells. A module manufactured by a domestic OEM using imported cells costs around 16 cents per watt, compared with 22.5 cents per watt when domestic cells are used, a premium of 6-7 cents. Over 150 gigawatt (GW) of renewable projects are under construction as of June-end.
India has recently achieved 300GW of non-fossil capacity led by solar power generation. By 2030, the Centre aims to reach 500GW of non-fossil capacity. The renewable energy sector has been affected by a number of factors including generation curtailment and prices of solar power falling to zero on the exchanges.
India has recorded electricity curtailment equivalent up to 18% of average monthly solar generation of 13 terawatt hours (TWh), resulting in compensation payouts.
India has recorded an electricity curtailment equivalent to 18% of the average monthly solar generation of 13 terawatt hours (TWh) that is resulting in compensation payouts.