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: The move aims to protect developers from penalties.
: The move aims to protect developers from penalties.

Deadline extended for clean energy projects

  • The extension will be equivalent to the period of lockdown and another 30 days for normalization of services
  • The move will protect clean energy developers from the risk of penalties, including fines and encashment of bank guarantees for missing their project completion deadline

NEW DELHI : India has asked its agencies implementing clean energy projects to allow developers more time to complete such projects, on account of delays caused by the nationwide lockdown to contain the coronavirus pandemic.

In an attempt to help the country get back on its clean energy trajectory, this time extension will be equivalent to the period of lockdown and an additional thirty days for normalisation of services after the lockdown ends.

Recognizing that the 40-day nationwide lockdown will delay all execution, the move will protect clean energy developers from the risk of penalties, including fines and encashment of bank guarantees for missing their project completion deadline.

“In an order issued on 17-4-2020, the Ministry noted that, thus, the extension will be for the period of lockdown plus 30 (thirty) days. This will be a blanket extension - there will be no requirement of case to case examination. There will be no need to ask for any evidence for extension due to lockdown," the ministry of new and renewable energy said in a statement on Tuesday.

This comes in the backdrop of India extending the lockdown by another 19 days till 3 May; while allowing a conditional withdrawal of the lockdown from 20 April in areas where the spread has either been contained or prevented.

“The Ministry has also said that all Renewable Energy implementing agencies of the Ministry of New & Renewable Energy (MNRE) will treat lockdown due to COVID-19, as Force Majeure ," the statement added.

This announcement comes in the backdrop of the government’ earlier decision to consider the disruption in the supply chains due to spread of coronavirus under the force majeure clause.

Mint reported on 6 February that power project developers in India, who source solar modules from China, plan to declare force majeure on meeting project completion deadlines because of supply disruptions caused by the coronavirus outbreak. Invoking the force majeure clause enables a developer to cite disruption from an unforeseen event—in this case the flu epidemic—to justify the delay.

According to power purchase agreements (PPAs), delays in project completion timelines attract penalties. India is running what will become the world’s largest clean energy programme with the aim to have 175 GW of clean energy capacity by 2022. By then, it plans to add 100GW of solar capacity, which may need investments of around $80 billion, growing more than threefold to $250 billion by the end of 2030.

Starting 20 April, India is allowing key parts of the economy, including agriculture, logistics, infrastructure, e-commerce and factories (located outside the municipal corporations and municipalities’ limit), to return to work in areas where no infections have been reported. In addition, construction activities for those roads, irrigation projects, buildings and industrial projects have been allowed where workers are available on site and no workers are required to be brought in from outside.

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