The act of god clause: Declaring disruptions in the renewable energy supply chain as a 'Force Majeur', the Indian government has provided RE developers immediate relief in the form of an extension of deadlines for under construction projects by up to three months | Photo: Brookings Institute

COVID 19 impact: RE project deadlines extended, could delay projects by 6 months?

Following a national lockdown, the Centre, last week, extended deadlines by up to three months to complete renewable energy projects that are under construction. Extensions shall be given case-by-case depending upon the length of the lockdown and time required for remobilisation of work. Earlier, the government had agreed to consider the pandemic-related disruption in the supply chains as Force Majeure. Now, developers don’t face risk of penalties, fines and encashment of bank guarantees for missing project deadlines.

The industry expects commercial operational dates (CODs) to get delayed by six months, particularly the projects that were expecting modules to arrive between January and March. Experts also believe it may potentially delay rooftop solar targets of 40GW by 2022, considering it is only at 3GW today. Rooftop is expected to be impacted more because during social distancing, installers can’t be allowed at homes and factories are closed. Grid-connected solar is less likely to be hit as it is classified as an essential service.

The Centre has also asked states to allow free movement of RE material and staff during the nationwide lockdown. The ministry has requested states for a waiver under Section 144, nationwide lockdown, or any other limitation on the number of people to assemble at project sites and other related locations where it may be required for operation and maintenance activities of renewable power generation.

DISCOMS get 3 months moratorium to clear dues, outstanding dues rise nearly 32% to 88,311 cr in Jan

The government has given DISCOMs a three-month moratorium for paying dues to power generating companies (gencos) following a national lockdown till April 14 to contain the spread of coronavirus. The penal charges for late payment of dues have also been waived. The overdue of solar and wind energy producers stood at ₹6,618.20 crore in January.

Total dues the DISCOMs owe to power producers rose nearly 32% to ₹88,311 crore in January 2020 over the same month previous year, reflecting stress in the sector. DISCOMs in Rajasthan, Uttar Pradesh, Jammu & Kashmir, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu owe the largest share of dues. DISCOMs owe a total of ₹76,192 crore to state and private power generating firms, 39% of the total is owed to state firms 25.94% to private firms. State firm NTPC has to recover the maximum overdue of ₹11,007.50 crore, while among private generators, DISCOMs owe the highest overdue of ₹3,421.68 crore to RKMP (RKM Powergen Pvt Ltd). 

Energy demand drops during coronavirus lockdown, RE gains ascendance

Over the past week, India has witnessed a sharp drop of 25-40% drop in peak energy demand compared to the same period last year. According to data provided by national grid operator Power Systems Operation Corporation Ltd (POSOCO), the country’s total power generation dropped 25% over the past 10 days and over 30% compared to the corresponding period last year. The fall in demand has seen India rely heavily on non-fossil fuel sources of energy. India’s share of non-fossil fuel energy in its mix is currently between 27-29%, up by 7-10 percentage points since the third week of March when the share hovered around the 20% mark.

Last month, the sale of renewable energy certificates (RECs), which are market-based financial instruments, rose over 64% to 21.42 lakh units in February compared to 13.02 lakh the same period last year owing to high demand, according to official data. One REC is created when one megawatt hour of electricity is generated from an eligible renewable energy resource.

1,000 MW solar rooftop projects stuck because of Haryana discoms ?

Are Haryana DISCOMs blocking ‘open access’ rooftop solar projects because it threatens their monopoly? That’s the charge of the developers. They say ‘open access’ allows them to supply power directly to customers through the grid without routing it through a DISCOM, but they do need the concerned DISCOM’s approval. Developers allege the DISCOMs are resisting the scheme because they lose revenue without being an intermediary. Around 1,000 MW of rooftop solar projects are unable to transmit power because distribution companies are not giving them the required connectivity, rooftop developers’ lobby, The Distributed Solar Power Association alleged. They plan to approach the Haryana Electricity Regulatory Commission against the DISCOMs that have been reported as declining to comment.

Committee on energy sceptical about ministry meeting 2022 solar target

The Standing Committee on Energy, in its latest report, has said the Ministry of New and Renewable Energy (MNRE) has a lot to do to meet the 2022 renewable target.  As on January 31, 2020, renewable energy accounted for 86.32 GW, with 23.42% of the total market share. Government said that the target for solar power was 8,500 MW for FY2019-20, and the ministry has achieved 5,885 GW as on January 31, 2020. According to the ministry, the total target for solar power as on January 31, 2020, was 100 GW, out of which the installed capacity as on January 31, 2020, was 34.03 GW. Out of this, 23.88 GW is under development, and 39.47 GW has been tendered. The total installed capacity and projects under the pipeline are 87.38 GW.  

The ministry, however, said developers were facing constraints related to land acquisition, evacuation infrastructure, and issues with state policy for development of solar and business environments.

Earlier, the power minister had said DISCOMs were reluctant to buy renewable energy, because they have to curtail equivalent amounts of power from thermal power generating projects. Even if the DISCOM purchases solar at ₹2.44 per KWH, it still has to pay an extra ₹1.60 as fixed cost of power to thermal power generators. For the DISCOM, the total cost of power is ₹4.04. Solar is also intermittent in nature and is not available during peak hours, said the power minister.

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