PremiumIn a major relief to green energy developers, the government has decided to extend the deadline for completing their projects following disruptions caused by the second wave of the pandemic, said two government officials aware of the development
In a major relief to green energy developers, the government has decided to extend the deadline for completing their projects following disruptions caused by the second wave of the pandemic, said two government officials aware of the development.
This assumes significance given the contracts or power purchase agreements (PPAs) signed by the developers specify strict commissioning deadlines, and a failure to meet them can result in fines and encashment of their bank guarantees.
The decision by the ministry of new and renewable energy (MNRE) to grant extensions to those projects having a scheduled commissioning date (SCD) on or after 1 April 2021 comes against the backdrop of large parts of the country shutting down to contain the spread of covid-19.
Given the restrictions imposed by states affecting the movement of personnel, labour, material and delay on multiple approvals and depleted workforce at project sites, this extension is in addition to the one granted by MNRE up to a maximum of six months following the first wave of the covid outbreak last year.
An MNRE spokesperson did not respond to queries emailed late Wednesday.
“While applying for such time extension, renewable energy (RE) developers shall undertake that the time extension shall not be used as a ground for claiming termination of power purchase agreements or for claiming any increase in project costs, including interest during construction or upward revision of tariff," the MNRE said in its order issued on Wednesday and reviewed by Mint.
The caveats are aimed at preventing developers from using the pandemic as an excuse to exit unviable projects.
India is running the world’s largest clean energy programme to achieve 175 gigawatts (GW) of renewable capacity, including 100GW of solar power and 60 GW of wind power by 2022. A lot is riding on these projects to help the country meet its climate change commitments.
Mint reported earlier about the government’s plans to take strict action against green energy firms and their promoters leveraging the pandemic as an excuse to exit projects. The government not only plans to blacklist such companies but also censure their promoters, preventing them from taking part in future projects. With some project developers exploring termination of their PPAs without encashment of bank guarantees, the MNRE has taken a dim view of such practices as it can impact India’s green energy plans.
“The actual quantum of time extension shall be decided in due course depending on the covid-19 related developments that take place in the coming weeks," the 12 May order said.
“Requests for time extension on account of the resurgence of covid-19 and subsequent issuance of instructions by states/UTs restricting the mobility of people have been carefully examined in the ministry. It is noted that while there are no central government instructions for a countrywide lockdown, since the beginning of April 2021, several states/UTs have taken various measures like night curfew, imposition of Section 144, weekend lockdown, etc. which may have affected RE projects," the order added.
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