Renewable Energy Industry Welcomes Govt’s 5-Month Extension Move for Covid-19 Hit Projects

The stakeholders from the renewable energy (RE) industry have appreciated the government’s move to extend the time for 5 months for schedule commissioning of the projects.  

Earlier, the government had considered the lockdown period due to corona virus i.e. between March 25, 2020 and May 31, 2020, as a force majeure.

In this regard, the Ministry of New and Renewable Energy (MNRE) has now issued a notification stating that, “all RE implementing agencies of MNRE will treat lockdown due to Covid-19, as force majeure.”

“All RE projects under implementation as on the date of lockdown, i.e. March 25, 2020, through RE implementing agencies designated by the MNRE or under various schemes of the MNRE, shall be given a time extension of 5 months from March 25, 2020 to August 24, 2020,” the Ministry added.

It further said that “this blanket extension, if invoked by the RE developers, will be given without case to case examination and no documents/evidence will be asked for such extension.”

The move is significant as earlier, the Ministry had granted a 30-day blanket extension beyond the lockdown period for RE projects, where there would be no requirement of case-to-case examination. However, the industry stakeholders had requested the government for more time extension at that time, stating various challenges related to labour & logistics mobility etc.

Speaking on the 5-month time extension, Ritu Lal, Heading Institutional Relations at Amplus Solar, commented “developers had been making several representations to the MNRE on the matter for the last few months. We thank the Ministry for taking note of our concerns on this issue and allowing us this much required extension.”

Besides, MNRE has now also stated that, the timelines for intermediate milestones of a project may also be extended within the extended time provided for commissioning.

Also, the Ministry has urged RE project developers to pass on the benefit of such time-extension, by way of granting similar time-extensions, to other stakeholders down the value chain like Engineering Procurement Construction (EPC) contractors, material, equipment suppliers, Original Equipment Manufacturers (OEMs), etc.

Meanwhile, MNRE has also asked State Renewable Energy Departments (including agencies under Power/ Energy Departments of States, but dealing in renewable energy) that they may also treat lockdown due to Covid-19, as force majeure and may consider granting appropriate time extension on account of such lockdown.

“This is a positive move by MNRE and showcases their intent of helping the sector tide over these tough times by providing the developers sufficient extension timelines. Having said that, the government should not impose more trade barriers after extending SGD such as Basic Customs Duty. The power costs have already gone up, any additional duty will further increase the cost of power for consumers and this would not a great move given the current situation” said by Pinaki Bhattacharyya, Co Founder and CEO, Amp Energy India.