MNRE gives 76-day extension to clean energy projects
Premium- Green energy project developers have been given an extension for completion of their projects due to the difficulties arising from the second wave of pandemic
The ministry of new and renewable energy (MNRE) has given a 76-day deadline extension to green energy project developers for completion of their projects, on account of difficulties arising from the second wave of the pandemic.
This follows MNRE’s decision on 12 May for an extension, and assumes significance given that the contracts or power purchase agreements (PPAs) signed by developers specify strict commissioning deadlines, and a failure to meet them can result in fines and encashment of their bank guarantees.
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“In this regard, it has been noted that with the improvement in the covid-19 situation, many states/union territories have begun the process of unlocking. Broadly, the period of disruption due to second surge of covid-19 seems to be from 1 April, 2021 to 15 June, 2021," MNRE said.
“It has also been noted that activities related to renewable energy (RE) projects are covered under essential activities, and are allowed to continue even during the lockdown situations," the office memorandum added.
Given the restrictions imposed by some states, this is in addition to the six-month extension granted by the MNRE on account of the first wave.
“However, in order to facilitate the ease of doing business and as a measure of relief to RE projects so that they can deal with difficulties arising out of the restrictions imposed on account of the second wave, it has been decided that the entire period of disruption can be allowed as time-extension to RE projects," the memorandum stated.
This comes at a time when there is a growing interest in India’s green economy. India is also working on a ‘green tariff’ plan that will help power distribution companies (Discoms) supply electricity generated from clean energy projects at comparatively lower tariffs than from coal and other conventional fuel sources. Once the plan is implemented, a Discom can exclusively purchase green electricity and supply it at a ‘green tariff’, which will be the weighted average tariff of green energy that the consumer will pay.
Knowing that some developers may feign covid-19 as an excuse for ‘low-cost exit options’ for unviable projects that they were awarded, the MNRE in its earlier 12 May order said, “While applying for such time-extension, RE developers shall undertake that the time- extension shall not be used as a ground for claiming termination of Power Purchase Agreement (PPA) or for claiming any increase in the project cost, including Interest During Construction (IDC) or upward revision of tariff."
State-run Indian Renewable Energy Development Agency Ltd has also extended the bid submission deadline for setting up 12 gigawatts (GW) of solar power projects till 15 June. Also, in one of the largest tranches of Indian clean energy contracts on offer, developers are eyeing projects of at least 9 GW that is being bid out.
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