NEW DELHI : The Union government on Thursday announced an extension of completion deadline of green energy projects, recognizing that the 21-day nationwide lockdown that came into effect Wednesday will delay all execution.

Such a move will protect clean energy developers from the risk of penalties including fines and encashment of bank guarantees for missing their project completion deadline. India’s 1.3 billion people are currently under the world’s largest lockdown aimed at stemming the spread of COVID-19 pandemic.

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.

“All renewable energy projects under implementation will be given extension of time considering period of lock down and time required for remobilisation of work force," new and renewable energy secretary Anand Kumar said in a tweet on Thursday.

The growing pandemic has impacted India’s green energy trajectory. 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.

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.

Chinese solar module manufacturers supplying to India include Trina Solar Ltd, Jinko Solar Co. Ltd, JA Solar Holdings, ET Solar, Chint Solar Co. Ltd and GCL-Poly Energy Holdings Ltd. Indian solar power developers are concerned about the timely delivery of components to commission their solar parks and rooftop projects.

India’s green energy sector has been facing problems with banks wary of lending to developers as they suspect the viability of projects that have agreed to sell power at rock-bottom tariffs. There are also issues regarding delay in payments by state-run power distribution companies (discoms), non-allocation of land to wind power projects, besides transmission and connectivity related challenges.

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