Home >News >India >Covid-19 lockdown: Centre extends completion deadline for green energy projects

NEW DELHI: The Centre on Thursday extended the completion deadline for India's green energy projects, given the 21-day nationwide lockdown and consequently time required for workforce remobilisation.

Such a move will protect clean energy developers from the risk of penalties, including fines and encashment of bank guarantees, for missing the set deadlines. According to power purchase agreements (PPAs), any delay in adhering to timelines attracts penalties.

Prime Minister Narendra Modi on Tuesday announced a nationwide 21-day lockdown--the largest in the world--aimed at containing the spread of Covid-19 disease.

The pandemic has spread across 175 countries, with nearly half a million affected and death toll at 21,293. In India, cases have surged past 650, with number of deaths at 13.

“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.

This follows an earlier decision to consider the disruption of supply chains due to spread of novel coronavirus in China or elsewhere under the force majeure clause.

The fast spreading pandemic has hit India’s green energy ambitions.

The government is running what will become the world’s largest clean energy programme, targeting 175 gigawatts (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 during 2023-30.

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 novel coronavirus outbreak.

Invoking the force majeure clause enables a developer to cite disruption from an unforeseen event—in this case the pandemic—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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